ITV and John Wood set for return

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Broadcaster ITV and energy services supplier John Wood Group look set to re-enter the top share index later this month, data from index compiler FTSE group showed yesterday.

Packaging distributor Bunzl and miner African Barrick Gold are likely to fall into the mid-tier FTSE 250 index, according to market capitalisation data at the close of trade on Thursday.

“ITV looks well positioned. The stock looks undervalued relative to its European peers and we expect this valuation gap to close quickly,” Peel Hunt said in a note to clients in which it upgraded its rating to ‘buy’.

ITV said this week that it planned to restore its dividend in July after a recovery in advertising markets and improved programming helped double 2010 earnings and deliver a strong start to the new year.

Shares in the broadcaster have gained nearly 33 per cent already in 2011 after rising more than 30 per cent in both 2009 and 2010.

Companies outside the FTSE 100 that grow to rank among the 90 largest by market capitalisation are automatically promoted, while the FTSE 100 firms with the lowest value or that fall to 111th spot or below drop into the FTSE Midcap 250 index.

Shares in John Wood Group gained sharply last month after the energy services group agreed to sell its well support division to General Electric for $2.8bn.

Index compiler FTSE will announce the changes to the FTSE UK index after market close next Wednesday based on Tuesday’s closing prices, but the changes have to be confirmed by a FTSE committee on Wednesday.