Blue chip shares have been enjoying a remarkable run taking the Footsie Index to a new all-time high of over 5,500 on 2^nd February. Financials again have been the main movers and shakers with bid speculation surrounding many issues as the big have to get bigger in order to survive the rough and tumble of international competition.

But the star story of the month has been the possible Glaxo Wellcome/SmithKline Beecham tie up. It would seem that like competition in the world of banking, pharmaceutical companies are finding that the costs of developing new and evermore complicated drugs is too costly without consolidation in the sector. If this merger goes ahead the enlarged combination will become the largest pharmaceuticals company in the world. Quite an achievement for Britain.

Mega mergers have therefore set the pace in the FTSE Index and so far as one can see this process is likely to continue as the importance of pricing authority in a globalised market becomes an essential element of success.

Just to confirm this phenomenon which has been going in the US for quite some time we have compared the performance of the various indices. Over the last 12 months this shows that in each of the periods under the spotlight, the FTSE 100 Index out-performed all the other Index groupings. In the comparison against the FTSE 250 Mid Cap over the last 12 months the FTSE 100 Index out-performed by a whopping 23%.

This will be poor consolation to those who anticipated that the small companies would make up the ground lost over previous years but for netPEP investors who bought when we launched, they have seen the price of units in the FTSE Tracker Fund increase by nearly 30%.

The best performance overall was recorded by Sun Life followed closely by other insurers, Legal & General and GRE. Pharmaceuticals, Glaxo Wellcome and SmithKline Beecham added 13.1% and 12.9% respectively with similarly strong showings from most of the Utilities (Centrica +16%, National Power +13% and British Telecom +12%)

Worst performers included Dixons -20% over concerns on poor retail sales over Christmas and yet again Standard Chartered and HSBC who lost -17% and -13% respectively as a result of continuing alarm about the economic crisis hitting the Tiger economies. General Industrials also featured at the foot of the table with BOC,BTR, Siebe, Smiths Industries and Rolls Royce chalking up losses of between 9.63% and 16.9%. .

There were three newcomers to the illustrious list of the top 100 British Companies. RMC Group and TI Group gave up their places to healthcare company Nycomed Amersham and fund manager Amvescap. The other newcomer was British Energy which took up the place vacated by the mega merger of Grand Met and Guinness now called Diageo.