Tullow oil set to drop out of FTSE 100 in reshuffle

AA is likely to join the FTSE 250 after floating
The FTSE 100 is set for a reshuffle later this month with Tullow Oil expected to drop out of the benchmark of the biggest companies listed on the London Stock Exchange.

Meanwhile, Virgin Money and AA are likely to be added to the FTSE 250, the next 250 biggest companies after the top 100, after floating.

Tullow Oil is likely to be placed in the FTSE 250. The Irish firm recently reported a £1.3bn pre-tax loss, its first in 15 years, having revealed a $2.3bn (£1.5bn) write-off in January.

Jordanian drugmaker Hikma Pharmaceuticals, which floated in London ten years ago, is set to take the oil company’s place.

Fellow oil explorer Afren, which is in the process of resolving a funding crisis, is at risk of dropping out of the FTSE 250. If room is needed for Virgin Money and AA, two companies, Game Digital and Oxford Instruments, could be demoted from the FTSE 250.

Oil companies have suffered as a supply glut and waning demand from emerging economies depressed prices. It crashed to just $45 per barrel in mid-January, since recovering somewhat, and trades around $60 per barrel.

Other firms are in contention to enter the FTSE 250. Indices are changed quarterly to ensure investors know which are the biggest companies listed on the FTSE. Movers are picked out by a committee of market experts based on share closing prices today. The results of this quarterly review will be revealed tomorrow, and should come into force later this month.

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