Lufthansa (LH, Frankfurt International) parent, Lufthansa Group, risks demotion from Frankfurt's blue-chip DAX index German business daily, Handelsblatt, has reported. Market analysts who spoke to the paper said that if Lufthansa Group's share price and market capitalization continue to fall, that could precipitate the Group's relegation to the MDAX, the index that caters for companies ranked below the DAX.
A review of the DAX's composition is due to take place in September and among the criteria used to determine eligibility include market capitalization, as measured by the free float, and stock trading volume over the past twelve months. DAX-listed firms must be ranked higher than thirtieth for both criteria for them to maintain their listings.
From a six-year market high of EUR20.26 per share last year in July, a series of damaging strikes not to mention the devastating crash of germanwings (4U, Cologne/Bonn) flight 4U9525 last month, ostensibly due to pilot suicide, have hit the Group's share price hard with it now trading at EUR12.42.
While of the thirty firms listed on the DAX Lufthansa Group ranks seventeenth in terms of trading volume, its overall market capitalization has now slipped to thirty-seventh putting its continued presence on the elite index in jeopardy.
However, according to the paper, despite Lufthansa's slide, the Group's DAX membership is not in immediate danger given that German chemical giants K+S and Lanxess are said to be in a far more precarious situation in terms of their respective stock-market listings.
