The FTSE 100 looks set to welcome Russian firms for the first time when compiler FTSE Group unveils its quarterly review on Wednesday in the face of calls for the firm to toughen up the entry requirements to Britain's premier stock index. Investors have recently raised concerns that it is too easy for companies with low free floats and hazy corporate governance standards to enter the index, and this has prompted FTSE to look at tightening its future requirements.
Recently-listed Russian steelmaker Evraz and precious metals miner Polymetal International, together with Irish building materials group CRH, are expected to join the internationally focused index. Evraz, 35 percent-owned by tycoon Roman Abramovich, only floated on the London Stock Exchange on November 7, while Polymetal, owned by Alexander Nesis and Alexander Mamut, with Czech investor PPF, started conditional trading on the London market on October 28.
The UK Listing Authority (UKLA) gave Evraz a waiver to move to a premium London listing despite having a free float of just 20 percent, below the usually required minimum of 25 percent, a spokeswoman for the Russian firm said at the time of its London flotation. That means, under FTSE's current rules, Evraz will be eligible for its UK index at this latest review.
Traditionally, one of the strengths of the UK market had been its openness in terms of companies listing, Rod Paris, head of investments at Standard Life Investments, said at a Reuters Summit on Wednesday. The introduction of the two miners, which would be the first Russian companies to enter the FTSE 100, would also further increase the influence of resource stocks in the index.
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