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 completed 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 lender Provident Financial.
The postal service has actually been a FTSE 100 company since 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 company's place in the FTSE 100 or FTSE 250 is determined by its 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 falls to the 111th position or below, it will be benched to the FTSE 250.
Nicholas Hyett, equity expert at Hargreaves Lansdown, stated: "Royal Mail has actually lost its battle to preserve a place 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 deal with hard market conditions.
"Letter volumes have actually leaked away quicker than the group had actually expected, partially as an outcome direct marketing drying up as business self-confidence slumped after the EU referendum, while pricing stays tough in parcels."
Shares in Provident Financial, which just recently released a profit warning and parted methods with its president 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.
On the other hand, NMC Health, the Abu Dhabi-based medical facility operator, will go up from the FTSE 250 into the FTSE 100 in addition to housebuilder Berkeley Group.
All the changes from the review be executed at the close of organization 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 vehicle hire group, miner Petra Diamonds and building company 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 partially greater versus the dollar at $1.2931.