Stricken UK lender falls off FTSE-100

Northern Rock Plc, DSG International Plc, and Daily Mail and General Trust Plc are among the seven companies that will be demoted from the FTSE 100 Index in the biggest reshuffle of the UK benchmark in six years.

TUI Travel Plc, Thomas Cook Group Plc, Kelda Group Plc, Cairn Energy Plc, Admiral Group Plc, FirstGroup Plc, and G4S Plc, will replace them in the index, the FTSE Group said in an e-mailed statement. The changes will take effect on December 24.

Stocks may rise or fall as investors buy or sell shares to mirror changes in the benchmark. There are 102 companies listed on the FTSE 100 with an overall market capitalization of 1.6 trillion pounds.

The reshuffle shows that "consumer plays are coming under a bit of pressure and I expect this to continue", said Andrew Bell, head of research and strategy at Rensburg Sheppards Plc in London.

"Consumer spending and the housing market are going to be pretty tricky for the next couple of quarters."

Barratt Developments Plc, Mitchells & Butlers Plc, Punch Taverns Plc, and Tate & Lyle Plc will also be demoted from the FTSE 100. The changes follow a quarterly review.

Companies automatically join the FTSE 100 when they become one of the 90 biggest in Britain by market value, according to FTSE Group. Companies that are ranked 111th or lower are removed from the measure.

Northern Rock, the mortgage lender bailed out by the Bank of England, has slumped 84 percent since September 13 when it sank amid speculation it may have funding problems because of the turmoil in global money markets.

DSG, Europe's second-biggest consumer electronics retailer, has reported a drop in profit for the past three years and the stock lost 41 percent in 2007.

Daily Mail, the owner of the eponymous publication and the Mail on Sunday, has fallen 25 percent.

Barratt Developments, the United Kingdom's second-biggest homebuilder by volume, will be removed after its shares fell 61 percent this year. Mitchells & Butlers, the owner of the O'Neill's pub chain, and Punch Taverns, the UK's largest pub landlord by outlets, will also be demoted.

Tate & Lyle, maker of the sweetener Splenda, has slumped 45 percent in the last 12 months.

In September 2001 eight stocks were removed and eight added after the September 11 attacks in New York and the collapse of the Internet bubble.

Travel firms join index

TUI Travel, the company formed when TUI AG's tourism unit merged with First Choice Holidays Plc, and Thomas Cook, Europe's second-largest tour operator, will join the FTSE 100.

Kelda, the water supplier to UK cities including Leeds and Sheffield, has risen 15 percent since the company announced it received a bid from Citigroup Inc and HSBC Holdings Plc.

Cairn, the UK oil company that sold shares in an Indian unit last year, has advanced 42 percent on the year and is trading at a record high.

Admiral, a UK car insurer, FirstGroup, the biggest operator of trains in the UK and G4S, the world's second-largest security company, will all be promoted.

Bloomberg News

(China Daily 12/14/2007 page16)