Investec gets FTSE 100 spot

London - South Africa-based investment bank Investec [JSE:INLP] will replace insurance-focused takeover vehicle Resolution in the FTSE 100 index, FTSE Group confirmed on Wednesday, following the latest index review.

Resolution's share price has fallen by around 20% since the beginning of the year, having first been offered to investors at 100 pence in a December 2008 flotation that raised £600m to fund takeovers.

The company, which aims to buy and merge at least three life insurers or asset managers before selling or listing the enlarged group in 2012, has so far completed just one deal - last year's £1.8bn purchase of insurer Friends Provident - although a number of potential takeovers have been mooted.

Investec shares, meanwhile, have jumped 22% this year, riding the coat-tails of the equity market's recovery, although nine-month results from the company at the end of January were pretty static.

However, a number of banks and brokerages including Goldman Sachs and Morgan Stanley have upgraded ratings for Investec in the wake of the numbers, saying there was more conviction that the group's earnings will trough in 2010 as impairments peak.

Companies outside the FTSE 100 that grow to rank among the 90 largest by market capitalisation are automatically promoted into the blue chip index, while FTSE 100 constituents with the lowest value or which fall to 111th spot or below drop into the FTSE Midcap 250 index.

Six other changes were made to the FTSE 250 index following the quarterly review, with Afren, Hansen Transmissions, Gartmore Group, Senior, ITE Group, and Hansteen Holdings all joining the mid caps.

Moving down to the FTSE Small Cap index will be Interserve, Evolution Group, Paypoint, Northgate, PV Crystalox Solar and Thames River Multi Hedge PCC

The index changes will take effect from the start of trading on Monday March 22.

- Reuters