The Irish Stock Exchange (ISE) yesterday sent letters to all companies listed on the market requesting details of the individual shareholdings in their companies in a move that is expected to lower the index weighting, and as a result the popularity, of some major Irish companies.

A spokesman for the exchange said plans to re-weight the components of the Iseq index of Irish shares by the "freefloat" method had been well flagged and it was simply an attempt to bring the Iseq into line with other European indices.

Still, the timing of the letter is particularly apt, given the news this week that Independent News & Media is seeking to empower its directors to withhold dividends from investors who do not provide information on the ownership of their shares. This is believed to be a move by the company to keep tabs on any stake-building in the group.

As part of the changes proposed by the ISE, member companies are being requested to provide information on any shareholding that is believed to be "strategic", ie that is held by a particular individual or institution with a view to making a bid for the company or some of its assets down the line, or for blocking a bid by another party.

As a result, those particular shares are deemed to be not for sale, and according to the new weighting rules should not be counted in a company's freefloat.

Any reduction in the size of a company's freefloat will lead to a lower weighting. This in turn could lead to a slowdown in demand for that stock, as fund managers who are required to track movements in the index will buy fewer shares in a company if its importance declines in relation to the index.

Companies that will suffer as a result of the changes include groups such as Greencore, in which property developer Liam Carroll has a 21.6 per cent holding, and Aer Lingus, which is more than 50 per cent-owned by the Government and Ryanair.

Sir Anthony O'Reilly would also become his own worst enemy, with his substantial holdings - more than 25 per cent in Independent News & Media and, along with the Goulandris family, more than 50 per cent in Waterford Wedgwood - significantly lowering the two companies' potential weighting.

Conversely, the main financial institutions would fare well under the new regime, with the biggest shareholder in AIB, Anglo Irish Bank and Bank of Ireland holding a maximum of 6 per cent of the bank's shares.

This means that the three main financials, which combined account for almost 37 per cent of the index, will see their weighting - and their popularity - rise significantly.

Meanwhile, Aer Lingus's 1.2 per cent weighting is expected to decline significantly.