November 29, 2017 / 3:24 PM / 19 days ago

Takeaway app Delivery Hero joins European index in tech-heavy rejig

LONDON (Reuters) - German takeaway app Delivery Hero, which listed five months ago, will join the STOXX 600 benchmark index in December as rapidly rising tech stocks dominate its quarterly reshuffle.

Delivery Hero’s stock is up by around 40 percent from its IPO price, raising its market capitalization to 6.7 billion euros ($7.9 billion).

Along with companies such as Just Eat, which is expected to be promoted to Britain’s FTSE 100 index later on Wednesday, Delivery Hero’s addition reflects consumer demand for cheap, efficient, on-demand services to order food.

“This market is structurally growing, as consumer habits trend towards convenience and online continues to take market share from telephone ordering,” Liberum analyst Ian Whittaker wrote this month, initiating Delivery Hero at “buy”.

Technology stocks also dominate other additions announced on Wednesday by STOXX, the index provider owned by Deutsche Boerse, with Dutch firm BE Semiconductor set to join the tech sector which has been the best-performing this year thanks in part to stellar gains from chipmakers.

Siltronic, which makes silicon wafers for semiconductor components, is also joining the index following a 192 percent rise in its shares this year.

French engineering consultancy Altran Technologies is the third technology firm to join the index, while tire maker Pirelli’s ascension to the STOXX 600 came after its entry into Milan’s top 40 FTSE MIB index was confirmed in October. It will join both indices in December.

Societe Generale analysts said the addition of BE Semiconductor was a surprise, as was the deletion of British drugs firm Hikma whose shares have fallen 47 percent this year, cutting its market value to 2.5 billion pounds.

Other companies demoted from the index included troubled British subprime lender Provident Financial, whose shares have sunk 69 percent this year, and insurers UnipolSai and NCC.

Broadcaster Mediaset Espana was also deleted from the index. Media stocks across Europe have been among the worst-performing this year, along with real estate and healthcare.

STOXX also said it is switching Germany’s Bayer from the chemicals sector to healthcare, and Britain’s Close Brothers from financial services to banks.

The index changes will be effective at the market open on Dec 18.

Reporting by Helen Reid; editing by Alexander Smith

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