Royal Mail Leaves The FTSE 100 In Quarterly Shake-up

30 August 2017
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The FTSE 100 closed greater on Wednesday, however 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 along with troubled doorstep loan provider Provident Financial.


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


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


A 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 evaluation.


If a group has a worth that puts it at 90th location or above, it will join the FTSE 100. If it is up to the 111th position or listed 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 keep a location in the FTSE 100. We're not exactly sure that's something you can lay at primary executive Moya Green's door however, as the group continues to deal with hard market conditions.


"Letter volumes have actually seeped away quicker than the group had expected, partly as a result direct marketing drying up as business self-confidence dropped after the EU referendum, while prices remains difficult in parcels."


Shares in Provident Financial, which recently issued a profit caution and parted ways with its president Peter Crook, completed 1.68% lower at 891.27 p to value the company at ₤ 3.1 bn. It will likewise come down to the FTSE 250.


In contrast, NMC Health, the Abu Dhabi-based hospital operator, will go 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 take impact 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 company Carillion will fall out of the FTSE 250. Those going 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 higher versus the dollar at $1.2931.