Royal Mail Leaves The FTSE 100 In Quarterly Shake-up

30 August 2017
ShareSave


The FTSE 100 closed higher on Wednesday, however Royal Mail is set to leave the ranks of the blue chip index.


The blue chip index ended up 27.83 points at 7,365.26.


In FTSE Russell's quarterly evaluation of its constituents, Royal Mail will be relegated to the FTSE 250 alongside troubled doorstep loan provider Provident Financial.


The postal service has actually been a FTSE 100 business considering that quickly after being privatised in 2013.


On Wednesday, shares closed at 390.5 p, giving the postal service a market capitalisation of ₤ 4bn.


A business's location in the FTSE 100 or FTSE 250 is determined by its market capitalisation at the close of trading on the day of the review.


If a group has a worth that puts it at 90th location or above, it will join the FTSE 100. If it falls to the 111th position or listed below, it will be benched to the FTSE 250.


Nicholas Hyett, equity expert at Hargreaves Lansdown, stated: "Royal Mail has lost its struggle to preserve a place in the FTSE 100. We're not sure that's something you can lay at primary executive Moya Green's door however, as the group continues to face difficult market conditions.


"Letter volumes have actually seeped away much faster than the group had anticipated, partially as an outcome direct marketing drying up as service confidence dropped after the EU referendum, while pricing remains tough in parcels."


Shares in Provident Financial, which recently released a profit warning and parted methods with its chief executive Peter Crook, finished 1.68% lower at 891.27 p to value the company at ₤ 3.1 bn. It will also come down to the FTSE 250.


In contrast, NMC Health, the Abu Dhabi-based healthcare facility operator, will move up from the FTSE 250 into the FTSE 100 along with housebuilder Berkeley Group.


All the changes from the evaluation be executed at the close of service on 15 September and will work from the start of trading on 18 September.


The FTSE 250 closed 88.67 points up at 19,616.56.


Northgate, the industrial car hire group, miner Petra Diamonds and construction firm Carillion will fall out of the FTSE 250. Those moving up to the FTSE 250 consist of online wagering group 888 Holdings.


On the currency markets, the pound edged up by 0.48% against the euro at 1.0843 euros. Sterling was marginally greater against the dollar at $1.2931.