New Economy Rules as Didata Enters FTSE 100
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[Johannesburg, SOUTH AFRICA] South African IT company Dimension Data is set to be accepted into the London Stock Exchange's FTSE-100 on Wednesday as the 'new economy' pretenders edge out established enterprises such as Rolls Royce and Associated British Foods.
According to Dow Jones, Didata is one of six technology enterprises that are expected to break through into the LSE's upper echelon today at the expense of old economy companies. The other five companies are Psion, Baltimore Technologies, Spirent, Electrocomponent and Granada Media.
That these technology enterprises are expected to edge out British landmark Rolls Royce, Scottish and Newcastle Breweries, Blue Circle Industries, Associated British Foods and the steel group Corus Group is an indication of the shift in business dynamic towards new economy operations. These traditional enterprises will be relegated to the lesser FTSE-250.
These projections are based upon the market capitalization of these companies on Monday with the final list drawn up on Tuesday based upon market capitalization at the end of yesterday's trade. An FTSE committee will ratify the list today and the ratings will become effective from Friday.
Shares rose from the initial 520p (US $7.54) a share upon listing to close yesterday at 670p (US $9.72), testifying to Didata Chairman Jeremy Ord's belief that the company is underrated when compared to its international competitors. Prior to the London listing, Didata expected to be rated within the top 70 of the FTSE-100 and analysts subsequently suggested that the networking company could even break through into the top half of the index.