December 4, 2012 / 7:56 AM / in 5 years

STOCKS NEWS EUROPE-Richemont to join STOXX Europe 50 in December

Shares in the world’s second largest luxury goods group, Richemont, will be added to the European blue-chip STOXX Europe 50 index from Dec. 24, replacing French telecom group France Telecom.

Shares in the STOXX Europe 50 attract interest from funds that track indexes, such as exchanged-traded funds (ETFs).

The reshuffle, announced after the European market close on Monday, could represent potential demand of 2.7 million shares for Richemont, and a potential supply of 9.6 million shares for France Telecom, according to Societe Generale estimates published before the reshuffle.

Richemont’s stock rose by around 50 percent this year, boosted by sales growth in the Asia-Pacific region, although the group said last month this was slowing.

France Telecom’s share price has fallen by a third this year to levels not seen since 2002 and the firm cut its dividend earlier this quarter as it predicted a 1 billion-euro slump in operating cash flow next year.

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