S&P Dow Jones Removes Adani Ports From Sustainability Index; Stock Drops
Adani Ports & Special Economic Zone Ltd. was among the top laggards on the Nifty 50 after S&P Dow Jones said it’s removing the nation’s largest port operator from its sustainability index.
“Adani Ports will be removed from the Dow Jones Sustainability Indices following a media & stakeholder analysis triggered by recent news events pointing to heightened risks to the company regarding their commercial relationship with Myanmar’s military, who are alleged to have committed serious human rights abuses under international law,” the division of S&P Global said in a statement on its website.
The change will be effective April 15, 2021.
According to a Reuters report, Adani Ports is building a $290 million port in Yangon on land leased from the military-backed Myanmar Economic Corporation.
Myanmar has been under siege since Feb. 1 when a group of generals seized power from incumbent leader Aung Sang Su Kyi. The Junta has killed at least 614 civilians since then, according to a Bloomberg report. “Shipping lines have suspended operations as truck drivers strike, leaving cargo containers trapped at the ports. Restrictions on cash withdrawals have business struggling to pay employees,” the report said.
The World Bank is projecting the economy of Myanmar to shrink 10% in 2021, by far the worst in Asia, even as peers rebound from a pandemic-induced slump. “A 10% contraction in growth for a poor country seems to me disaster enough already,” Aaditya Mattoo, the World Bank's chief economist for Asia, told Bloomberg in an interview. “And when I add to it all the other costs, which have an impact on long-term growth, I think we have a pretty dismal scenario.”
Shares of Adani Ports fell as much as 5.5% around noon on Tuesday to Rs 703.45 apiece. The stock is down for the second straight session. Of the 26 analysts tracking the company, 21 have a ‘buy’ rating, four suggest a ‘hold’ and one recommends a ‘sell’, according to Bloomberg data. The average of the 12-month consensus price target implies an upside of 5.5%.