Foxconn cut from Hong Kong's benchmark index

Jun 08, 2011

Foxconn International, the world's biggest contract electronics supplier, has lost its blue-chip status after being dropped from Hong Kong's Hang Seng Index (HSI), an HSI official said Wednesday.

The Taiwanese technology giant's departure from the city's benchmark index comes as AIA, one of Asia's largest listed life insurers, and Hengan, a major Chinese producer of toilet tissue and nappies, were added to the Hang Seng.

The changes took effect Tuesday.

The move is another blow to Foxconn -- the world's largest maker of computer components which produces goods for Apple, Sony and Nokia -- which has come under pressure after a number of suicides and labour unrest at its Chinese plants.

"When deciding which companies are to be added to or dropped from the HSI, companies are evaluated on several factors, including their financial performance, their market capitalisation and turnover," the index spokesman told AFP, without commenting on the reasons Foxconn was dropped.

Foxconn shares have lost about 34 percent of their value in the past year, with the stock closing about two percent lower at HK$3.82 (49 cents) on the wider exchange Wednesday.

In March, Foxconn said it swung to a net loss of $218.3 million in 2010 on revenue of $6.63 billion, about eight percent lower than in 2009.

The loss added to mounting woes at the Taipei-based firm over the past few years.

Three workers died and 15 others were hurt in a blast last month at the plant of a Foxconn subsidiary in southwestern Chinese city of Chengdu.

The incident led the firm to shut down all its workshops that polish electronic parts and products in China after an initial investigation showed it may have been caused by an explosion of combustible dust.

And last year at least 13 of its employees died in apparent suicides, which activists blamed on tough working conditions and led to calls for better treatment for its staff.

The company is not the first export-focused firm to be dropped from the Hang Seng Index.

Yue Yuen, a Taiwanese athletic and casual footwear manufacturer which makes shoes for brands including Nike, Puma, Adidas and Timberland was likewise removed from the index in June 2009.

Foxconn employs about one million workers in China, about half of them based in its main facility in the southern industrial boomtown of Shenzhen.

The company has been expanding its workforce in other parts of China as it seeks to scale back the size of its Shenzhen plant amid rising labour costs.

Explore further: IBM posts lower 1Q earnings amid hardware slump

add to favorites email to friend print save as pdf

Related Stories

Foxconn to give Chinese workers another pay raise

Jun 06, 2010

(AP) -- Foxconn workers in China will get another pay raise in coming months, on top of an increase that just took effect in response to recent worker suicides, the company said Sunday.

Foxconn to hike prices to cover China pay increase

Jul 22, 2010

(AP) -- Foxconn Technology Group, which makes iPhones and other gadgets for global technology companies, plans to charge them more to partly cover wage increases at its mammoth manufacturing compound in southern China.

China urges factory safety after iPad plant blast

May 25, 2011

(AP) -- Beijing urged Foxconn Technology Group and other Taiwanese companies on Wednesday to ensure safety in their mainland China factories after a fatal blast at a facility that makes Apple iPads.

Hong Kong labour activists push for iPhone boycott

May 25, 2010

Hong Kong labour activists said Tuesday they plan to kick off a worldwide boycott of Apple's newest iPhone after a spate of suicides at a southern Chinese factory that makes the iconic device.

Recommended for you

Weibo IPO below expectations, raises $285.6 mn

11 hours ago

Sina Weibo sold fewer shares than expected in its US IPO which was priced below expectations ahead of a Thursday listing that takes place after tech selloffs on Wall Street.

'Chief Yahoo' David Filo returns to board

12 hours ago

Yahoo announced the nomination of three new board members, including company co-founder David Filo, who earned the nickname and formal job title of "Chief Yahoo."

Fired Yahoo exec gets $58M for 15 months of work

12 hours ago

Yahoo's recently fired chief operating officer, Henrique de Castro, left the Internet company with a severance package of $58 million even though he lasted just 15 months on the job.

IBM posts lower 1Q earnings amid hardware slump (Update)

22 hours ago

IBM's first-quarter earnings fell and revenue came in below Wall Street's expectations amid an ongoing decline in its hardware business, one that was exacerbated by weaker demand in China and emerging markets.

User comments : 0

More news stories

Tiny power plants hold promise for nuclear energy

Small underground nuclear power plants that could be cheaper to build than their behemoth counterparts may herald the future for an energy industry under intense scrutiny since the Fukushima disaster, the ...

Turning off depression in the brain

Scientists have traced vulnerability to depression-like behaviors in mice to out-of-balance electrical activity inside neurons of the brain's reward circuit and experimentally reversed it – but there's ...

Is Parkinson's an autoimmune disease?

The cause of neuronal death in Parkinson's disease is still unknown, but a new study proposes that neurons may be mistaken for foreign invaders and killed by the person's own immune system, similar to the ...