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To: 2MAR$ who wrote (113182)	6/11/2011 5:45:17 PM
From: 2MAR$	Respond to of 213182

Of note: Foxconn blue chip status is now being dropped from Hang Seng, there's changing landscape & squeezed margins that's been trending for these "made for export" companies. This loss of value, is of course much to do with the wage inflation along the coastal industrial centers , lessening demand in Euro & falling fortunes of Nok & Motorola . Replaced with toilet paper & sanitary napkins manufacturer for the domestic consumption . blogs.ft.com Ouch. First the suicides. Then the plant explosion. Now Foxconn International, the scandal-hit Taiwanese company that toils in the shadow of high-profile clients such as Apple, is being stripped of its blue-chip status after it was dropped on Tuesday from Hong Kong’s benchmark Hang Seng index. In its place will be AIA, Asia’s largest listed life insurer and Hengan, a company best known in mainland China for its Space 7 brand of sanitary napkins and its Anerle brand of baby diapers. Hengan is also a major producer of toilet tissue. The demotion caps a stunning reversal of fortunes for Foxconn, the world’s largest contract electronics manufacturer, which at its peak in 2006 had a market capitalisation of over HK$194bn ($25bn), when its shares were changing hands at HK$27 a pop. On Tuesday, the stock closed at HK$3.90 a share. Foxconn made its fortune on the back of the ‘Made in China’ model, producing goods for export at ultra-low costs in high volume and in quick time. But this business model came unstuck last year after a spat of highly publicised suicides at its Shenzhen campus forced the company to rise wages and put an end to its factory-town model. Both of these moves have squeezed the company’s narrow margins. Rising commodity prices have done the same. As a result, the company posted a net loss of $218m (£135m) in 2010, compared with net income of $38.6m the year before. Foxconn is the not the first export-focus company to be demoted from the Hang Seng. Yue Yuen, another Taiwanese company that no one has heard of, but which makes a third of the world’s shoes for brands such as Nike and Timberland, was relegated from the index in 2009. This leaves, Li & Fung, which sources goods for the likes of Wal-Mart, as the only export-focused company left on the index. But for how much longer?