Italian shipbuilder Fincantieri is expected to join Italy’s blue-chip stock index, FTSE MIB, for the first time next month, traders said on Thursday, strengthening the influence of the defence sector amid a global rally driven by geopolitical tensions.
The stock is likely to replace utility Hera or medical diagnostics group DiaSorin, currently among the smallest-weight constituents of the blue-chip index which has 40 members.
The FTSE MIB’s composition is reviewed every three months on the basis of companies' market capitalisation, and the liquidity of their shares.
The deadline for calculations related to the index update will expire next Monday, November 24, with Fincantieri representing a potential index weight of around 0.3 per cent, with DiaSorin slipping to 0.20 per cent and Hera at 0.5 per cent.
Traders say Hera is the main candidate to exit, based on volumes traded, but counting the next three sessions, DiaSorin’s much lower stock prices could matter, one trader noted. An alternative scenario, seen as far less likely, would see Interpump leave the index.
Only index compiler FTSE Russell can define the number of shares and the free float to be applied.
Shares in Fincantieri, which is expanding the military side of its business, have surged about 170 per cent so far this year, hitting a record high of €26.92 on Oct 9 before easing to €18.72. They started the year at €6.9.
Defence stocks have been among the strongest performers globally, boosted by conflicts in Ukraine and Gaza, and their ties to technology. Leonardo has gained about 90 per cent in the year so far.
(Reporting by Giancarlo Navach, editing by Keith Weir)