18 October 1999

The London Stock Exchange plans to have two separate indices for TechMARK, it’s new technology market to be launched next month. There will be an All-Share index in which all 174 stocks will be included. There will also be another index, the TechMARK 100, that will include 100 companies with a maximum market capitalisation of 5bn.

This would exclude many of the top-weighted stocks such as British Aerospace and British Telecom.

One company, which could be included in the TechMARK 100, said: "This should help focus investors on the high-tech growth companies the market was established to promote, rather than the ones that curiously made it onto the market by having a large market capitalisation."

The plans for the indices were revealed to a small group of companies at a conference last Thursday, but the LSE ask that the companies respect the LSE’s wish to keep the proposals confidential.

The LSE, headed by Gavin Casey, is also believed to be considering lowering the £50m minimum market capitalisation requirement.

This follows complaints that many growth companies which should be included in TechMARK do not yet have £50m market capitalisation via an online consultation document.

Marc Gordon, managing director of Close Fund Management, said that if FTSE does launch the TechMARK 100, Close will issue a tracker fund for the stocks.

"Companies in the proposed TechMARK 100 are not held in a large number of portfolios, and tat makes them attractive. There will be more focus on up-and-coming technology stocks."

He cited the example of Hambrecht and Quist’s high-tech fund in the US, which has outperformed the S&P 500 over the past five years and said he hopes the same thing will happen in the UK.