Royal Mail Leaves The FTSE 100 In Quarterly Shake-up

30 August 2017
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The FTSE 100 closed higher on Wednesday, but Royal Mail is set to leave the ranks of the blue chip index.


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


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


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


On Wednesday, Royal Mail's shares closed at 390.5 p, giving the postal service a of ₤ 4bn.


A company'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 place or above, it will join the FTSE 100. If it is up to the 111th position or below, it will be benched to the FTSE 250.


Nicholas Hyett, equity expert at Hargreaves Lansdown, said: "Royal Mail has actually lost its battle to preserve a location in the FTSE 100. We're not sure that's something you can lay at president Moya Green's door though, as the group continues to face tough market conditions.


"Letter volumes have actually seeped away faster than the group had expected, partially as a result direct marketing drying up as service confidence dropped after the EU referendum, while rates remains difficult in parcels."


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


On the other hand, NMC Health, the Abu Dhabi-based health center operator, will move up from the FTSE 250 into the FTSE 100 along with housebuilder Berkeley Group.


All the modifications from the evaluation be implemented 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 commercial vehicle hire group, miner Petra Diamonds and building and construction company 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% versus the euro at 1.0843 euros. Sterling was partially greater against the dollar at $1.2931.