By Sudip Kar-Gupta
LONDON (Reuters) - Hikma Pharmaceuticals (L:HIK) has pushed Tullow Oil (L:TLW) out of Britain's benchmark FTSE 100 (FTSE) equity index, FTSE Group (NYSE:LSE) announced on Wednesday, following a drop in Tullow's stock price and a rise in Hikma's shares.
Getting into the FTSE 100 can often fuel further demand for a company's shares, since funds that track the FTSE or invest in the index can then add that stock to their portfolio.
The rankings are decided on market capitalisation. Companies with the lowest market cap in the FTSE 100 drop into the FTSE 250 mid-cap index (FTMC), and companies with the highest market cap on the FTSE 250 get promoted into the top index.
Tullow has been hit by a slump in the oil price and concerns that a boundary dispute between Ivory Coast and Ghana could delay a project off the West African coast.
By contrast, in November Hikma raised its annual revenue growth target due to strong demand for its products.
Engineering company Weir Group (L:WEIR), which had been seen as at risk of being demoted from the FTSE 100, also managed to stay in the top UK equity index.
VIRGIN MONEY TO JOIN FTSE 250
Shares in Tullow Oil closed down 1.3 percent on Wednesday, while Hikma's shares rose 2.5 percent. Tullow Oil shares have fallen around 13 percent since the start of 2015, while Hikma has risen around 24 percent.
Among other changes, motoring group and car insurer AA Plc
Imagination Technologies (L:IMG), which supplies graphics processing to Apple Inc (O:AAPL) and British bank Virgin Money (L:VM) are also set to enter the mid-cap index.
Oil producer Afren (L:AFRE), which has defaulted on its 2016 bonds, will drop out of the FTSE 250 index along with video games retailer Game Digital (L:GMDG) and nanotechnology tools manufacturer Oxford Instruments (L:OXIG).
The changes to the FTSE 100 and 250 indexes will take effect at the start of trading on March 23.