The FTSE Group today confirmed that metals and mining company Evraz (EVR) and precious metals producer Polymetal International (POLY) will be ousted from the FTSE 100 Index, to be replaced by housebuilder Persimmon (PSN) and builders' merchant Travis Perkins (TPK).
That commodities-related companies are being relegated and property-related companies promoted illustrates the fate of these sectors in recent months and, in particular, the increasingly optimistic sentiment surrounding the property sector. Persimmon was demoted from the FTSE 100 Index in 2008 as housebuilders suffered severely during--and in the wake of--the financial crisis.
The changes will be implemented after the market closes on Friday June 21 and shares in each company will start trading in their new respective indices when the market opens on Monday June 24.
FTSE rebalances the UK’s leading index and its mid-cap index on a quarterly basis. “The rules-driven reviews ensure the indices continue to portray an accurate reflection of the market they represent, and form an essential component to the management of the indices,” FTSE said in a statement Wednesday.
FTSE operates a reserve list for the FTSE 100 Index, to be used in the event of a corporate action occurring between reviews e.g. merger, acquisition, delisting or suspension. In such cases, the reserve list constituent with the largest market capitalisation (on the date of the corporate action) will replace the outgoing constituent. With immediate effect, the following reserve list for FTSE 100 will be used:
- 3i Group
- Direct Line Insurance Group
- Invensys
- Sports Direct International
- Ashtead Group
- Intu Properties
As Evraz and Polymetal International move down into the FTSE 250 Index, from the FTSE 100 Index, several other former-small caps are simultaneously moving up into the mid-cap index: Countrywide, Crest Nicholson, DCC, Esure Group, and Xaar.