UPDATE 2-Shares in Mexico's Alfa tumble after removal from MSCI

(Adds closing price)

MEXICO CITY, Feb 2 (Reuters) – Shares in Mexican conglomerate Alfa dropped more than 16% on Tuesday before partly recovering, the first day of trading on the local stock exchange after index provider MSCI said it would remove the company from its Global Standard Indexes.

Alfa’s shares were trading 8% lower at 11.86 pesos per share shortly before noon local time after falling as much as 16.28% after the market opened, which prompted the stock exchange to temporarily halt trading.

The stock closed down 6.7% at 12.03 pesos.

Alfa said in a statement that it did not know the reasons for the decline in its shares.

On Friday, index provider MSCI said it would remove the company “in light of a potential investability issue for foreign investors due to low foreign room,” with the removal to take effect as of Wednesday’s close. (Reporting by Daina Beth Solomon and Noe Torres; editing by Drazen Jorgic and Richard Pullin)

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