Britain’s small companies index will “cease to exist” in about four years’ time if a takeover “feeding frenzy” and dearth of stock market floats continues, a leading City analyst says.
The FTSE SmallCap index has shrunk from 160 companies at the end of 2018, excluding investment trusts, to 114 in December last year, Charles Hall, head of research at the stockbroker Peel Hunt, told clients on Wednesday.
As companies continue to be promoted from the SmallCap index to the FTSE 250 to replace mid-cap businesses that are taken over, the more junior index will shrink, in a decline exacerbated by a lack of new companies joining the market.
“If we extrapolate the current trend line then the last company will leave the FTSE SmallCap in
