A&B named to
Dow index

It will be one of 20 stocks
in the Dow Jones Transportation Average

By Russ Lynch
Star-Bulletin

Hawaii's biggest company in the transportation business, Alexander & Baldwin Inc., tomorrow will become one of the 20 companies whose share prices make up the Dow Jones Transportation Average.

A&B, which owns Matson Navigation Co., replaces APL Ltd., the former American President Lines, which is being acquired by Neptune Orient Lines Ltd. of Singapore.

A&B has interests in sugar, land and agriculture but its transportation unit, Matson, accounts for more than half its revenues.

The Wall Street Journal, the Dow Jones & Co. subsidiary that creates the stock average, said its editors do not disclose why a particular company is chosen for the index. However, there are broad guidelines, said James Hyatt, the Journal's statistics editor.

"In general we want to pick companies with a reasonably broad ownership that are major factors in their industry and are not narrowly traded," Hyatt said.

"Frankly the number of transportation companies is shrinking because of mergers and so on," he said.

John Kelley, investor relations vice president at A&B, said the company is pleased to be picked. "Obviously, it's nice recognition."

A&B asked Dow Jones in June to be considered as a replacement for APL. "We suggested that since such a large part of our revenue and operating profit is in transportation, we might be a suitable substitute for APL," Kelley said. A&B had revenues of $1.23 billion last year, $662 million of which came from Matson.

New York analyst Burton Strauss of Dominick & Dominick said he sees no reason why becoming part of the average should affect A&B's stock. "It may get a little more attention," said Strauss, adding that A&B's stock doesn't get much recognition and that the value it has in the marketplace "is probably more indicative of their assets than their transportation business."

A&B will be one of only three companies in the transportation average that are traded on the Nasdaq exchange instead of the New York Stock Exchange.