FTSE International Tracks The e-Boom

FTSE International is adapting its index classification system in the wake of the boom in e-commerce companies and the expected growth in this area. Following consultation with index users, FTSE International will recognise "e-tailers" by introducing a new subsector, "Retailers e-commerce", from 3 April 2000. This will allow investors to quickly pinpoint e-commerce retailers and should help increase the profile of those companies included in this new subsector. FTSE International will also monitor the level of e-commerce companies within the financial, leisure and media sectors and will introduce new e-commerce sub-sectors for these types of companies when appropriate. The growth and development of the internet has captured the attention of the public, press and investors alike, leading to a debate about the classification of internet-related companies. Does the fact that a company transacts business over the internet change the nature of the business itself, or is the Internet simply a marketing and/or distribution channel? This issue was debated at an early stage by the FTSE Classification Committee, the industry-wide group of independent market practitioners who oversee the FTSE Global Industry Classification System. The Heads of Research at the major broking and fund management companies were also consulted. The Committee concluded that retailers who conduct the majority of their business on the Internet or other electronic system (e.g. digital TV) should be classified separately from other retailers. As a result, from 3 April 2000 a new classification subsector, "Retailers e-commerce" will be created. This new subsector will join the four existing retailing subsectors (Discount & Super Stores and Warehouses, Retailers - Hardlines, Retailers - Multi Department and Retailers Soft Goods). Together these subsectors are combined to make the General Retailers sector . In time, as the sub-sector grows in size, it is expected that "Retailers e-commerce" will become a separate industry sector. Mark Makepeace, Managing Director, FTSE International, stated : "The internet is transforming market structures and these classification changes will make it easier for investors to identify those companies seeking to benefit from the e- commerce revolution."