Out with the new, in with the old as Xstrata, Johnson Matthey and Bunzl enter FTSE 100
It is out with the New Economy and in with the old with the latest reshuffle of the FTSE indices promoting a packaging group, a mining company and a chemicals specialist to the FTSE 100 today.
The trio move up to the top flight at the expense of New Economy stalwarts ARM Holdings, Logica and Electrocomponents, a distributor of electronics equipment whose profits had been swollen by the late Nineties boom in technology spending.
Bunzl, the paper and packaging group that also makes cigarette filters, is returning to the FTSE 100 after 14 years. It has reinvented itself as an "outsourcing services" group, supplying bags, boxes and food packaging for use by supermarkets. Johnson Matthey, the industrial conglomerate that makes chemicals and catalytic converters for cars, is returning to the FTSE 100 for the first time since 1984.
They will be joined by Xstrata, the Swiss-domiciled mining group. The company, whose chief executive is Mick Davis, only listed in London in March, when it raised £1.7bn to fund the acquisition of coal mining interests in South Africa and Australia.
Changes to the FTSE indices will be calculated using companies' market capitalisations at the close of trading yesterday, and announced later today. It made for a volatile day of share trading yesterday as speculators attempted to anticipate demand from tracker funds and other fund managers whose performance is benchmarked against FTSE indices.
Schroders, the fund management group, came under pressure when its position in the FTSE 100 looked vulnerable, but it rallied. However, a last-minute surge by ARM failed to save it from the chop. The chip maker remains one of the most highly-rated shares on the market, but has come under pressure as analysts question its growth prospects. Logica, the IT services group, has slid to 171 in the FTSE rankings after a string of profit warnings.
Marconi, Psion and Telewest, three former technology blue-chips, will drop into the FTSE SmallCap index.
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