Stock Market Week: Emap set to surrender its place in Footsie 100

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The Independent Online
FOOTSIE PROMOTIONS and relegations will for the last time be decided next week under the old stock market capitalisation system.

The blue chip index's steering committee is due to meet for its regular quarterly review to decide Footsie's composition. At the following meeting in December it will have to contend with the new "free float" rules, announced last week.

Unfortunately next week's old-style meeting is unlikely to be particularly exciting. It will probably produce only two changes - one in, one out.

It seems that on present form Emap, the publisher, will be ousted to make way for Old Mutual, the South African insurance giant which arrived a few weeks ago. A place has to be found for the Springboks with a market capitalisation of pounds 4.6m. Emap, with worries growing about its trading performance, has had a torrid run, falling from a 1,418p peak earlier this year to 991p where it is capitalised at pounds 2.5m.

Of course share-price ups and downs before the committee actually meets could prompt other changes at next week's get together; Stagecoach and Thames Water have at times looked to be in danger.

And the corporate changes at Allied Domecq will bring the drinks group nearer the bottom line. Just before the committee meets the group's pubs will be stripped out of the group following the pounds 2.7bn sale to unquoted Punch Taverns. Allied's price tag could, therefore, fall to near pounds 3bn, putting it uncomfortably close to the relegation zone.

But for Reckitt & Colman, the household goods group, it should be a very different story. Its unconvincing share-price display has taken it perilously close to the danger area. Yet if the merger with Dutch group Benckiser goes through - and it seems to be nearly there - the combined group will be valued at around pounds 4.8bn and claiming a mid-table place.

At the December meeting the Footsie rulers will for the first time have to make adjustments for a group's free share float. The change, which would appear to give the committee some degree of discretion, will be introduced in January; for the year 2000 they only apply to newcomers. Existing constituents will still be judged by the size system, which has been in play since Footsie started 15 years ago, until the changes for January 2001 are made.

Footsie is still, of course, the headline stock market measurement. It is, however, no longer a guide to the nation's health and wealth. Four South African groups are now members and another is thought to be on the way. It may not be long in this age of investment globalisation before other overseas companies come knocking on Footsie's door.

Biggest on this week's rather thin reporting schedule is the Sema computer group. It has enjoyed Footsie membership and remains on the index fringe and could, with a fair wind, force its way back into memberships next week. Currently it is a constituent of the mid cap index.

It is thought to have continued to trade well and its interim figures could come out at pounds 38m against pounds 31m.

Enterprise Oil, another former Footsie constituent is the other major with results this week. Like most of the company's reporting it is offering interim figures.

Its shares, together with those of other oil groups, suffered a hiccup last week as the crude oil price suddenly fell below $20 a barrel but they are still comfortably above the gloomy depths hit in the early days of this year.

Its first-half figures should reflect the improvement in the crude price for much of this year although production may have fallen slightly. Net income could emerge at pounds 13m against pounds 11.8m last time.

City attention is likely to be directed at the accompanying comments. Twice Enterprise has attempted to capture rival Lasmo. The first strike ended in embarrassing defeat; then "friendly" talks got bogged down and the deal which would make such sense remains as elusive as ever.

So the oil watchers will want to be satisfied that Enterprise is developing an independent future and that its asset portfolio will allow production to grow in line with its peers.

Save, the oil retailer where takeover rumours are never far away, is another with interim profits. The sharp price increase at the petrol pumps is likely to have come too late to influence its results which are expected to show profits of around pounds 1m against pounds 3.52m.

At one time, Save shares were high flyers; they hit 269p three years ago. But then profits were more than pounds 10m a year compared with the pounds 4.6m hit in the last full year.

Bunzl, the packaging group, is expected to have lifted its interim figures to around pounds 66m from pounds 62.3m, and Johnston Press, the newspaper publisher, is likely to achieve half time figures of pounds 25.5m versus pounds 24.9m.

House builder Persimmon is forecast to produce a pounds 30.5m interim against pounds 28.1m and construction group Amec could offer pounds 27m compared with pounds 22.6m.

Allied Carpets will also roll out figures. Its year's loss, say pounds 6m against profits of pounds 11.2m, will barely register a flicker on the battleometer as Wassall and the French Tapis St-Maclou struggle for control of the hard-pressed retailer