New indices centre on medium-size companies

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TWO NEW Stock Exchange indices will be introduced on Monday in an expansion designed to let investors see at a glance how medium-sized companies are performing.

The FT-SE 100, launched in 1984, measures movements of the 100 largest companies. The new FT-SE Mid 250 will measure movements of the 250 next largest companies. The FT-SE Actuaries 350 will be calculated by adding the two together.

At the same time, 35 sector indices based on the FT-SE 350 will be launched. These will be updated during the day like other FT-SE indices, allowing investors to see how different groups of companies react to news.

In January there will be further changes: a new FT-SE SmallCap index will be launched and the FT-Actuaries All-Share will be extended from 650 to 850 companies. Both will be calculated once a day.

Gordon Bagot of WM Company, the chairman of the index design working party, said the new index would be a 'better guide to UK plc'. But Peter Jones of Greenwell Montagu, a deputy chairman, said he thought the FT-SE 100 index would remain pre-eminent for some time.

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