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 completed up 27.83 points at 7,365.26.


In FTSE Russell's quarterly evaluation of its constituents, Royal Mail will be relegated to the FTSE 250 alongside struggling doorstep loan provider Provident Financial.


The postal service has been a FTSE 100 business since quickly 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 evaluation.


If a group has a worth that puts it at 90th place or above, it will sign up with the FTSE 100. If it falls to the 111th position or listed below, it will be benched to the FTSE 250.


Nicholas Hyett, equity analyst at Hargreaves Lansdown, said: "Royal Mail has lost its battle to maintain a place 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 face difficult market conditions.


"Letter volumes have permeated away faster than the group had actually anticipated, partly as an outcome direct marketing drying up as slumped after the EU referendum, while rates remains hard in parcels."


Shares in Provident Financial, which recently issued a profit caution and parted methods with its chief executive 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.


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


All the changes from the evaluation be carried out at the close of organization 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 industrial 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 include online betting 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.