By John Harrington LONDON (SHARECAST) - The fourth-quarter reshuffle of the FTSE 100 index constituents list is expected to provide further evidence that the commodity boom is truly over, with two miners and two oilfield services groups expected to get the boot, along with bus and train operator Stagecoach. The miners soon to be on their way out are silver miner Fresnillo, which only joined the index last quarter, and platinum miner Lonmin. From the oilfield services sector, John Wood Group and Petrofac look certain to get the chop, by virtue of their much diminished market capitalisations; the former’s share price has halved in the last three months and the share price performance of Petrofac has not been much better. However, it is not all gloom for the mining sector, as one of the five stocks lined up to replace the departing companies is mining company, Randgold Resources. Mind you, Randgold is a miner of gold, a metal that has few industrial applications and is therefore little affected by the global slow-down in economic activity; its elevation to the Footsie is more a sign of panicking investors seeking the safety of gold than it is of a healthy demand for metals. Alongside Randgold Resources on the list of stocks likely to be promoted to the UK’s blue-chip index are two former Footsie members, sugar company Tate & Lyle, and Argos owner Home Retail. The quintet is completed by insurer Amlin, and outsourcing specialist Serco. The constituents of the FTSE 100 index are reviewed every quarter, with the changes announced midway through the last month of the quarter to allow index-tracking funds time to prepare to realign their portfolios. Promotion to the FTSE 100 is not just a matter of being ranked in the top 100 UK listed companies by market value. In order to preserve some element of stability the FTSE International Committee’s rules state that in order to gain promotion to the index, a company’s shares must be ranked 90th or higher by market value. Likewise, an existing member of the index will only normally be ejected if it is ranked 111th or lower by market value, an achievement managed comfortably by Petrofac, Fresnillo, Lonmin, Stagecoach and John Wood Group. Technology company Invensys just escaped relegation by virtue of a double-digit percentage rise on the last day before the cut-off. Companies eliminated from the FTSE 100 generally slip down to join the FTSE 250 unless their share price has been spectacularly trashed, as was the case with Marconi a few years back. The closest the market has seen this year to a demise as spectacular as Marconi’s (which, in its incarnation as GEC was once the most highly valued company on the London Stock Exchange) is Taylor Wimpey, which is expected to slide out of the FTSE 250 this quarter, having only recently exited the FTSE 100.

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