Russian IPOs in spotlight as FTSE probes free float

COMPANIES that float only a small proportion of their shares in London could be barred from FTSE stock indices in future under new proposals from the index group yesterday.

FTSE is to consult on whether to make UK-based firms list at least 25 per cent of shares, rather than the current 15 per cent, to join its indices.

Its move follows growing unease among fund managers about the number of companies that want to benefit from being included in indices such as the FTSE 100 but keep most of their shares in private hands.

Managers voiced alarm last week after Russian miner Polyus Gold said it would list just 13 per cent of shares – now raised to 20 per cent – as they fear low free floats can leave them with little control over decision-making that can run counter to good governance.

Similar firms include Kazakh miner ENRC, which listed just 18 per cent of its shares in 2007; Fresnillo and Essar Energy with 23 per cent; and Glencore, which listed 20 per cent in May.

George Dallas, director of corporate governance at F&C Asset Management, welcomed the probe.

“It’s positive news that this has been opened up for discussion and debate. We’ve seen a lot of commentary and the issues of corporate governance seem to concern a lot of market participants,” he told City A.M.