Royal Mail Leaves The FTSE 100 In Quarterly Shake-up

30 August 2017
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The FTSE 100 closed greater on Wednesday, but 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 review of its constituents, Royal Mail will be relegated to the FTSE 250 together with struggling doorstep lender Provident Financial.


The postal service has been a FTSE 100 company considering that soon after being privatised in 2013.


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


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


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


Nicholas Hyett, equity analyst at Hargreaves Lansdown, said: "Royal Mail has actually lost its struggle to preserve a location in the FTSE 100. We're uncertain that's something you can lay at chief executive Moya Green's door however, as the group continues to deal with hard market conditions.


" have actually seeped away faster than the group had expected, partly as an outcome direct marketing drying up as company confidence dropped after the EU referendum, while prices remains difficult in parcels."


Shares in Provident Financial, which just recently issued a profit caution and parted ways with its chief executive Peter Crook, ended up 1.68% lower at 891.27 p to value the business at ₤ 3.1 bn. It will likewise descend 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 modifications from the evaluation be implemented at the close of business on 15 September and will take effect from the start of trading on 18 September.


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


Northgate, the commercial lorry hire group, miner Petra Diamonds and building and construction firm Carillion will fall out of the FTSE 250. Those going up to the FTSE 250 include 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 higher against the dollar at $1.2931.