Logica set to step back into Footsie

THIS year's recovery in the high-tech sector is likely to be crystallised early next month when IT services group LogicaCMG rejoins the FTSE 100.

Its shares have soared 3 1/2 times this year from their March low of 90p. The group is ranked around 90th among Britain's top companies with a stock market value of £2.2bn. If Logica holds that level for the Footsie quarterly review on December 10, it will be automatically included in the index.

At one point in early 2000 Logica shares topped £27. A third of companies on the index were in IT, telecoms, electronics and media.

LogicaCMG's rising shares reflect the recovery of its business after managing itself well through the downturn. Logica shares could be buoyant over the next fortnight because the Footsie review coincides with the group's traditional pre-close statement and profits are expected to rise to £109m this year and £147m in 2004.

But at 283 1/4p, down 5p, its shares are starting to look fully valued on forward price/earnings multiples of 31 and 22.