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FTSE Russell on 1 December 2022 its fourth quarterly review of 2022, with three changes to the FTSE 100 and five changes to the FTSE 250. 2022 has seen the greatest number of changes to the FTSE 100 since 2009, during which the market was still grappling with the aftershocks of the 2008 financial crisis.  

Changes to the FTSE 100 index

, previously known as Standard Life Aberdeen plc has returned to the FTSE 100 from a short stint in the FTSE 250 Index, to which it was relegated in the Q3 FTSE reshuffle (see  for more information). The Edinburgh-based investment company has seen its share price increase 18% in November 2022 alone, beginning the month at 164 pence and finishing at 194 pence. The company appears to have just made its way back into the FTSE 100 index based on its November performance alone, combined with poor performances by Dechra Pharmaceuticals, Harbour Energy and Intermediate Capital Group. Abrdn’s share price had fallen 47.9% between February 2021 and September 2022, when it fell into the FTSE 250. Nonetheless, Abrdn’s return to the FTSE 100 is a remarkable turnaround, especially when considering the company’s poor , and the market volatility stemming from the September 2022 ‘mini-budget’.

Insurance company has made its FTSE 100 debut on the back of strong 2022 growth, particularly in gross premiums, which have increased by 2.77%. Beazley, the parent company of six of Lloyd’s of London syndicates, has also benefited from an increased interest in insurance on the back of the ongoing conflict in Ukraine (see: ). However,  the insurer has continued to branch out and intends to become an increasingly cyber-focused business. This approach has been beneficial for the company given amplified concerns surrounding cyber-warfare, particularly surrounding western companies. Beazley provides insurance for a range of industries and events, ranging from hurricanes, and terrorist attacks to the UK’s first rocket launch, due to take place at SpacePort, Cornwall in late 2022 or early 2023. Beazley’s place in the FTSE 100 is, however, not sealed given the company only just snuck in with a market capitalisation of £4.4bn, putting it in 89^th place on the index.

Glasgow-based has, like Abrdn, made its way back into the FTSE 100 after over a year in the FTSE 250. The engineering giant was demoted to the FTSE 250 in August 2021 and has struggled to re-join the FTSE 100 since. However, a move away from oil projects and an increased focus on mining has seen the company maintaining its full-year operating revenue, which has seen its stock price increase by 20% in recent months. The decision to move away from oil was one that was well-timed, particularly based upon current concerns over oil companies and their respective supplies, which are a ramification of the ongoing crisis in Ukraine, and limits on Russian exports. The Weir Group’s pivot to the mining sector has been well received by the industry, with strong demand for its engineering equipment. The company’s growth has been primarily because of the strong South American mining sector, and the maximisation of copper production. According to the company’s , copper makes up 21% of revenues by commodity/market. The company also highlighted that it is benefitting from the rise of electric vehicles and transition to renewable energy generation, and ‘significant increases in demand for metals like copper, nickel, and lithium.’

Changes to the FTSE 250

, the veterinary pharmaceuticals company has seen its shares fall by 20% in the past year alone, and consequently fell into the FTSE 250. The company, like other FTSE 100 exits, has deemed inflation in its key markets the major contributing factor impacting profits. Dechra entered the FTSE 100 in Q3 2021, partly because of a boom in pet ownership during the COVID-19 (Covid) pandemic. However, the company does not appear likely to drop out of the FTSE 250 altogether, unlike other constituents, because of its 13.8% rise in revenue from £606m to £681.8m in the year to 30 June 2022. Dechra is targeting future growth, and in 2022 established a new subsidiary in South Korea as the first step in what it refers to in its as its ‘geographical expansion’. The company already distributes its products globally, with a particularly strong foothold in the so-called American 'Animal Health Corridor'.

Harbour Energy plc’s entry into the FTSE 250 is unsurprising. The independent Scotland-based oil and gas company saw its share price go into free fall following the publication of its for the first half of the year.  Harbour was particularly impacted by the UK government’s announcement of the UK Energy Profits Levy (EPL), known commonly as the windfall tax. In an announcement, the company’s CEO, Linda Z Cook urged the UK government to consider ‘the consequences of any increase in or extension of the EPL’, and highlighted concerns over the company’s potential ability to ‘help ensure the UK’s energy security.’ The EPL adds a 25% surcharge to the profits made by oil and gas companies, on top of the 40% headline rate of tax. Harbour and other independent energy providers are coming under increased pressure amidst public pressure over energy prices, and activist investors over climate concerns (see: ).

Private equity firm was also demoted into the FTSE 250 after it missed earnings expectations. The firm, which specialises in direct and fund of fund investments, saw its revenue down 58% to £190m from H1 2022, and earnings per share at 0.12 pence down from 0.84 pence in the first half of 2022. Like other investment companies, Intermediate Capital has wrestled with decreased interest in equity markets, and high interest rates. London (and Europe)’s equity capital markets have struggled in 2022, with muted deal activity a continuing theme throughout the year (for an in-depth analysis of equity capital markets in 2022, see Market Tracker’s upcoming trend report: Trends in Equity Capital Markets).

Dropping out of the FTSE 250 index altogether are and . Home is a Real Estate Investment Trust with a particular focus on investing in houses for vulnerable people and social housing. Home saw its shares drop 20% on 30 November 2022 following the publication of a report which claimed the company inflated the value of their properties, sealing its departure.  Energy services company Petrofac was knocked out of the FTSE 250 following the conclusion of an investigation by the Serious Fraud Office into alleged historic wrongdoings at the company. However, it appears primed for improved fortunes after it that Shell UK Limited has chosen the company to undertake a five-year engineering and procurement scope in Oman.

Joining the FTSE 250 are and . Both are investment firms, Digital 9 is managed by Triple Point, and European is managed by Janus Henderson. Digital 9 makes investments in the digital infrastructure industry, with the aim of improving digital connectivity and communication. European invests solely in small and medium sized companies which have operations, listed, or domiciled in Europe (other than the UK).

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Risers and fallers