Porsche to skid from index

August 7, 2001 Posted: 0746 GMT

LONDON (CNN) -- German sports car maker Porsche is expected to lose its position on Frankfurt's index of mid-size companies, a report said on Tuesday.

Porsche is being ejected because it refuses to post earnings reports on a quarterly basis, The Wall Street Journal said.

Deutsche Boerse, the operator of the Frankfurt stock exchange, in January introduced a rule requiring all companies listed in its MDAX index to provide quarterly reports, the report said.

Porsche has told the exchange that three-month reports would reflect badly on its business during slow quarters. The car maker reports only six-month and full-year results.

The company's stance is one of the few remaining illustrations of Germany's old corporate, in which published earnings statements were semi-annual, often not very transparent, and aimed at a small group of shareholders, the report said.

Porsche's shares trade at around 400 ($353), and ordinary shareholders don't have the right to vote on company decisions.

In April, Porsche shares underwent a 10-for-1 split. Before the change, they traded at around 4,000, a price that would discourage all but the wealthiest shareholders.

"We held discussions, but we felt that the Deutsche Boerse put more value on the formal rules than the content," said Anton Hunger, a Porsche spokesman, who told the WSJ the company had not changed its position.

Although Porsche shares fell 4.4 percent to 399 on Monday, investors don't think the company's expulsion from the index will have a long-term effect on the car maker's share price, the report said. The stock will be included in Morgan Stanley Capital International's widely followed indices from the end of the third quarter.

In a strange twist, Frankfurt airport operator Fraport (FFRA) is a likely candidate to replace Porsche in the index. Fraport also doesn't issue quarterly reports, although it has promised to begin doing so in the first quarter of next year.

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