MSCI will become the fourth major index compiler to remove Hong Kongs beleaguered thin film solar company Hanergy from its index, following 50-plus business days of trading inactivity for the firm.
Having already been removed from the FTSE, the Hang Seng and Standard & Poors, MSCIs dumping of Hanergy is another blow for a company that was valued at $48.5 billion as recently as March this year.
However, since Hanergys share value took a tumble in May a plunge that saw the FTSE remove the company from the FTSE China 50 index and came shortly after a damaging investigation by the Financial Times into its curious trading patterns the company has been putting out fires left, right and center.
Hanergy was a former top 10 constituent of the MSCI Emergy Markets Diversified Multiple-Factor Index and Global Alternative Energy Index, but this lofty position is no more following the companys troubles. MSCI said that Hanergys deletion will be effective on September 1.
The ejection of the solar company means that any funds seeking to match the performance of MSCIs indexes can either write down or sell their holdings in Hanergy. While Hanergy remained in the indexes, funds were compelled to hold on to Hanergy stock, but the companys removal frees up potentially hundreds of millions of dollars for trading.
For Hanergy, its stock price remains suspended at $.50 cents per share, but over-the-counter trading has seen its value plunge much further than that.
Hanergys board is due to meet on Friday to approve the release of its interim first half financials for 2015. The company revealed earlier this month that it is likely to swing to a first half net loss following the cancellation of billions of dollars worth of deals with its parent company.