3i loses FTSE 100 status

The listed private equity firm is one of five companies to be removed from the UK Financial Times Share Index 100 due to insufficient market caps.

3i has been demoted from the Financial Times Share Index (FTSE) biggest 100 quoted firms. The FTSE Group decided to demote 3i and four other companies, including the London Stock Exchange and Tate & Lyle, after they failed to maintain a big enough market capitalisation to qualify for the rating. As of this morning 3i’s market capitalisation stood at £787 million, well below the £1.7 billion market capitalisation value required for the FTSE 100 as of December 2008.

The UK-headquartered 3i will now be listed under the FTSE All Share index, following a quarterly review by the FTSE Group.

“As most tracker funds track FTSE All Share rather than FTSE 100, the effect on our register should be minimal. The significant fall in stock markets and worsening economic outlook has clearly had an effect on 3i's valuation. Our focus is on our portfolio and in ensuring that 3i is well placed to take advantage of the opportunities as we emerge from this period,” a spokeswoman for the firm said in an email.

In 1994 3i was floated on the London Stock Exchange at a market capitalisation of £1.5 billion and subsequently entered the FTSE 100. However in the last year 3i’s share price has plummeted more than 77 percent and has dropped even further since its peak of 1,128.00 pence per share in November 2007. Its share price has been hovering around the 200 pence per share mark in recent weeks and this morning the shares were trading up nearly 12 percent over yesterday’s close price of 206 pence per share.

The five demoted firms will be replaced in the FTSE 100 by newly qualifying firms such as silver miner Fresnillo, platinum metal producer Lonmin and asset management company Foreign & Colonial Investment Trust. The changes mean that oil and gas will remain the dominant sector in the index, according to a statement from the FTSE Group.