By Neil Shah
LONDON -- The company that runs the London Stock Exchange will be ejected from the stock index it helped create, the latest sign of how hard the financial crisis has hit Europe's exchanges.
London Stock Exchange Group PLC no longer has a market value large enough to remain in the benchmark FTSE 100 index of the biggest U.K.-traded companies, according to FTSE Group, which manages the index.
Britain's 300-year-old exchange, which entered the index only 15 months ago, will drop out as of March 23 together with four other companies, FTSE Group said Wednesday.
Back in December 2007, when the LSE joined the FTSE 100, the company's market value was surging as it took over Italian rival Borsa Italiana. Since then, the company's share price has dropped some 80%.
The LSE says it isn't concerned. "We don't think it'll ... make us any less attractive an investment proposition," a spokeswoman said.
The company said last month that it had tapped former Lehman Brothers executive Xavier Rolet to succeed Clara Furse as chief executive. Ms. Furse struggled for months to persuade investors she had a plan for the future before announcing last year that she would resign. She will remain CEO until Mr. Rolet takes the reins May 20.
FTSE Group makes quarterly changes to the FTSE 100, which the LSE launched together with the Financial Times in 1984. Companies are ranked by market capitalization. The LSE will enter the FTSE 250 index.
The four other companies leaving: sugar refiner Tate & Lyle /zigman2/quotes/205109332/delayed UK:TATE +0.93% PLC, rail and bus operator First Group PLC, building-supplies company Wolseley PLC and private-equity firm 3i Group PLC.
The five will be replaced by miner Fresnillo /zigman2/quotes/201300065/delayed UK:FRES +2.04% PLC, platinum firm Lonmin PLC, oil-services firm Petrofac /zigman2/quotes/202340229/delayed UK:PFC +0.58% Ltd, quality-control firm Intertek Group /zigman2/quotes/209087067/delayed UK:ITRK -3.94% PLC and asset-management firm Foreign & Colonial Investment Trust.
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