Tullow Oil faces blue-chip relegation

Business News of Monday, 2 March 2015

Source: FT/OTCEER

Tullow Oil

Tullow Oil is set to fall out of the FTSE 100 when the quarterly changes to the blue-chip index are revealed this week.

Analysis by Société Générale, based on Wednesday’s closing prices, sees demotion for the Africa-based explorer after it reported its first pre-tax loss in 15 years last month.

Its place is set to be taken by Hikma Pharmaceuticals, the drugmaker that has been knocking on the door of the FTSE 100 for some time. The group, which listed in London in 2005, has grown to become one of the world’s biggest makers of generic injectable medicines, partly through acquisitions such as its $300m purchase of US-based Bedford Laboratories.

The likely addition of three recently floated companies to the ranks of the FTSE 250 would come at the expense of Game Digital, Oxford Instruments and Afren.

Game Digital had enjoyed a share price rise of more than three-quarters after its own June flotation, but the group’s value plummeted after it warned in January that heavy discounting over Christmas would hit profits.

The three newcomers to the mid-cap index are set to be Virgin Money, AA and B & M European Value Retail, which is chaired by Sir Terry Leahy.

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