FTSE reshuffle - Continence care trumps gold and construction as ConvaTec prepares to enter FTSE 100

Wednesday will see the latest reshuffle in the constituents of the FTSE 100 and on the basis of their market capitalisations gold miner Polymetal and Travis Perkins will drop out after three-month and three-year stays respectively, with market newcomer ConvaTec certain of promotion, given its £4.8 billion market valuation.
29 November 2016

Russ Mould, investment director at AJ Bell, comments:

“ConvaTec, which only listed in October in a £1.5 billion deal priced at 225p a share, is a health care equipment expert specialising in continence and critical care, as well as wound and skin care.

“Its rise to the UK’s premier benchmark is a further example of how the FTSE 100 reflects global economic and market trends, as a healthcare play replaces a gold miner and builders’ merchant.

“Only 30 of the original FTSE 100 from 1984 still remain in the index, 17 with the same name and 13 more with different names. Fourteen more are still members of the index following mergers, demergers or acquisitions.

Where are they now – FTSE 100’s original members, 1 January 1984

In FTSE 100, same name

17

In FTSE 100, different name

13

Acquired and now part of FTSE 100 firm

12

Spin-outs or mergers to create new FTSE 100 firm

2

Still quoted, another index

4

Acquired by another firm

39

Broken up

10

Bankrupt

3

Source: FTSE, London Stock Exchange

“Less clear cut is the identity of tomorrow’s second promotion candidate.

“It is a straight race between Irish-domiciled packaging giant Smurfit Kappa, which would join countrymen DCC and CRH in the index, and Scottish Mortgage Investment Trust.

“Scottish Mortgage is seeking to become only the second investment trust to make the grade, following on from Foreign & Colonial Investment Trust, which dropped out of the FTSE 100 in March 2004 having been promoted a year earlier.”

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