Synopsis: FTSE International, the index setters of the FTSE 100 and other UK FTSE indices, have announced the latest revision of index constituents.
Date posted: Friday, December 13, 2013
FTSE International has announced its latest quarterly recasting of the FTSE 100 and FTSE 250 indices, due to take effect from 23 December 2013.
Those expelled from the FTSE 100 are:
Vedanta Resources This is an India-centric oil, gas and mining business which joined the FTSE 100 in June 2006 as commodity prices surged. This time around it was weak commodity prices which had the reverse effect. Vedanta is the fifth basic resources stock to leave the FTSE 100 this year, following on from a list of probably unfamiliar names – Kazakhmys, ENRC, Evraz and Polymetal. Two years ago more than a third of the Footsie was accounted for by oil, gas and mining companies, whereas now it is under a quarter.
Croda Croda is a speciality chemicals company which joined the FTSE 100 in March 2013. Its size meant that when a profits warning was posted at the end of October and its share price fell, the company’s continued existence in the FTSE 100 suddenly looked very uncertain.
The two new entrants are:
Royal Mail This was not the Christmas present Vince Cable had in mind. At floatation, Royal Mail looked set to join the FTSE 250, but such has been the rise in its share price, it has leapt straight into the FTSE 100. It is likely to stay there – based on current market capitalisation Royal Mail takes the 65th slot.
Ashtead Group It may not be a household name, but Ashtead Group is a major global equipment rental supplier to mostly non-residential construction businesses. Its shares are up 87% in the last 12 months, driven by growth in its US business, Sunbelt Rentals.
COMMENT
The de-commodification of the FTSE 100 over 2013 will make the index more of a measure of UK plc rather than merely companies listed in the UK. However, as the resource companies leave the FTSE 100, so the FTSE 250 gains them and becomes slightly less of a pure measure of UK-oriented business.