Three companies demoted from the FTSE 100 at the last quarterly index reshuffle – London Stock Exchange, 3i Group and Wolseley – will return when the latest rejig is unveiled on Wednesday.
They will replace non-life insurer Amlin, leisure firm Whitbread, and power generator Drax Group in Britain’s index of leading shares.
3i has seen its share price more than double in the past three months, having shed 45% in the previous quarter.
Its poor performance in the first quarter of 2009 was caused by funding uncertainties, with investors concerned by the likely need for a rights issue, which 3i finally launched on May 8.
With the deeply discounted £732m cash call out of the way and debt worries receding, investors have focused on the likelihood of private equity firms being ready to profit from likely credit crisis buyout bargains.
Shares in companies that get demoted from the FTSE 100 tend to fall immediately after the move as funds that track the index are forced to sell them.
FTSE International will announce the changes to the FTSE UK index series after the market closes on Wednesday. The review is based on the closing share prices from Tuesday, June 9, but the changes have to be confirmed by a FTSE committee on Wednesday.
Companies not in the FTSE 100 that grow to rank among the 90 largest by market capitalisation are automatically promoted, while FTSE 100 constituents with the lowest value or that fall below the 110th spot drop into the FTSE Midcap 250 index.
None of the likely blue-chip demotion candidates were outside the top 100 stocks by market capitalisation at the close on Tuesday, but the three promotion candidates were all ranked above them.
Reporting by Jon Hopkins