The
same thinking in reverse applies to promotion candidates.
Promoted shares tend to be bought heavily by tracker funds
and by other funds that restrict their investments to shares
in the main indices.
You will notice that the market-capitalisation figures of
many of the FTSE Mid 250 and FTSE SmallCap promotion candidates
are followed by the letter ‘R’. This indicates
that they have been designated as reserves for promotion
in the event that one or more constituents are deleted between
quarterly reviews. They are shown in the tables in order
of their reserve position.
Although
market capitalisation is the main measure of a company’s
qualification for an index, there are others, so sometimes
a few of the
shares on the reserve list have lesser market capitalisations
than some of the other shares in the tables. Companies without
an ‘R’ are shown in descending order of market
capitalisation.
As
with demotion candidates, the final column has again been
devoted to price-to-tangible book value.
REFS is
a mine of invaluable information for the private investor.
