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The BBC's Rory Cellan Jones reports
"The biggest ever shake-up shows how stock market fashions have changed"
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Digby Jones, CBI Director General
"Dot com is here to stay and is tomorrow's industry"
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Donald Keith from the FTSE International
"We reflect the market"
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Wednesday, 8 March, 2000, 17:03 GMT
Shake-up for UK share index
ftse 100 6-3-00
Big changes in the UK stock leaderboard
A group of mainly high-flying technology stocks is to oust "old economy" laggards from the UK share premier league, the FTSE 100 index.

Promoted
Cable & Wireless Communications (telecom)
Freeserve (ISP)
Thus (telecom)
Psion (portable computers)
Baltimore Technologies (software security)
Celltech (pharmaceuticals)
Capita (support services)
Emap (media)
Nycomed Amersham (pharmaceuticals)
It is the biggest shake-up of the blue-chip index since it was launched in 1982.

The index committee based its decision on FTSE "ins" and "outs" from Tuesday's closing prices, which means nine new entrants, including shares of internet, telecoms and biotechnology companies.

An equal number are being relegated to the FTSE 250, which lists the next biggest firms after the top 100.

On the up

The promotion league table includes the UK's biggest internet service provider, Freeserve - despite a 19% drop in its value on Tuesday over competition fears - and Cable & Wireless Communications.

Relegated
Wolseley (builders merchants)
Imperial Tobacco (cigarette makers)
Thames Water (utilities)
Scottish & Newcastle (brewing)
Hanson (building materials)
Whitbread (brewing)
Associated British Foods (food makers)
PowerGen (utilities)
Allied Domecq (drinks)
Both of these benefit from changes in rules that previously excluded subsidiaries from being included in the FTSE 100.

Other new entrants include Scottish telecoms group Thus, hand-held computer devices manufacturer Psion, Irish-based web security firm Baltimore Technologies and biotechnology firm Celltech.

The changes will take effect from 20 March.

They demonstrate "the remarkable advance of many growth companies and the demise of many companies which have solid businesses, good cashflow and high yields, but have fallen badly out of favour," according to Graham Campbell, money manager at Edinburgh Fund Managers.

Kingston Communications

One promotion spot was decided earlier in the week when Kingston Communications joined the FTSE 100 on Tuesday following the completion of Royal Bank of Scotland's takeover of NatWest.

NatWest shares were deleted at close of trade on Monday, leaving a gap in the top 100.

Kingston is 97 years old and the only survivor of experiments with town hall phone systems around the turn of the last century.

Its owners, Hull City Council, decided to sell off 55% of the company last July to allow it to raise capital expand its operations.

Its shares have since risen six-fold and the council is now sitting on a windfall of more than 2bn.

Some 51,000 of Hull's residents - customers of Kingston Communications - bought shares in the company and those who invested the maximum 5,000 have seen the value of their shares rise to more than 30,000.

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See also:

08 Mar 00 | Business
Baltimore joins the elite
07 Mar 00 | Business
Freeserve shares tumble
06 Mar 00 | Business
Hull's 2bn bonus
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