Smurfit Kappa set to beat Scottish mortgage trust for FTSE 100 spot

Smurfit Kappa is likely to have managed to have clambered into the blue-chip FTSE 100 index, after its shares eked out a small gain on the London market on Tuesday.

The Dublin-based paper packaging group’s 0.9 per cent share price increase, lifting its market value to £4.25 billion (€5 billion), is seen by analysts to have pipped Scottish Mortgage Investment Trust for the coveted position, following active trading in both stocks in recent sessions.

"Based on [Tuesday's]closing prices, I expect FTSE to announce that Smurfit Kappa will be added to the FTSE 100 at the December 2016 review," said Colin Farley, head of quantitative analysis with Cantor Fitzgerald in London. "Smurfit closed 1.08 per cent higher than Scottish Mortgage Investment Trust."

Earlier in the day, stock market index provider FTSE Russell indicated that Smurfit Kappa was on track to lose out to Scottish Mortgage Investment Trust. The Irish group’s stock swung between a loss of as much as 0.4 per cent to a gain of as much as 2.4 per cent during a session of choppy trading as investors placed bets on its prospects of joining the index.

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Being added to the FTSE 100 would force fund managers who track the benchmark to buy £110 million (€128.6 million) worth of shares in the company.

Meanwhile, medical products and technologies group Convatec, which only floated on the London market last month, is all but guaranteed to be promoted to the FTSE 100 from the FTSE 250. Precious metals mining company Polymetal International and builders' merchants Travis Perkins face relegation.

FTSE Russell will announce the outcome of the quarterly review after European markets close on Wednesday. The changes will take effect from December 19th.

A promotion for Smurfit Kappa, led by Tony Smurfit, would leave it among five Irish-based groups on the prestigious index. The others are building materials group CRH, drugmaker Shire, fuel distribution and business support services conglomerate DCC, and bookmaker Paddy Power Betfair.

Earlier this year, Smurfit Kappa changed its Irish exchange listing to a secondary one as it upgraded its UK listing to a premium one, in an effort to pave the way for its entry to the FTSE indices.

It joined the FTSE 250 in June and just missed out on being lifted to the main London index in the last quarterly review at the end of August.