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 together with distressed doorstep loan provider Provident Financial.


The postal service has been a FTSE 100 business given 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 company's place in the FTSE 100 or FTSE 250 is identified 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 or above, it will join the FTSE 100. If it falls to the 111th position or listed below, it will be demoted to the FTSE 250.


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


"Letter volumes have actually leaked away quicker than the group had anticipated, partly as a result direct marketing drying up as organization confidence slumped after the EU referendum, while prices remains difficult in parcels."


Shares in Provident Financial, which recently issued a profit warning and parted methods with its primary executive Peter Crook, completed 1.68% lower at 891.27 p to value the business at ₤ 3.1 bn. It will also descend to the FTSE 250.


In contrast, NMC Health, the Abu Dhabi-based health center operator, will move up from the FTSE 250 into the FTSE 100 in addition to housebuilder Berkeley Group.


All the changes from the evaluation be implemented 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 business 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 betting 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 versus the dollar at $1.2931.