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GOING DOWN: Associated British Foods

Saturday 05 June 1999 18:02 EDT
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SHARES in Associated British Foods fell 4 per cent after reports that the FT-SE International was considering changing its rules to align more closely the number of shares in the market with their weighting in its indices. The index weighting is currently based on market capitalisation.

However, that can make a share price volatile or distorted where there is a dominant shareholder with a large stake, because tracker funds find it difficult to acquire enough shares.

Other shares that were hurt by the suggestion of change were Rentokil and BSkyB. It could also be harder for foreign or family-owned companies to join the FT-SE 100 index if the reforms go through.

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