Royal Mail Leaves The FTSE 100 In Quarterly Shake-up

30 August 2017
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The FTSE 100 closed higher 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 along with troubled doorstep lender Provident Financial.


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


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


A business's location 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 location or above, it will sign up with the FTSE 100. If it is up to the 111th position or below, it will be benched to the FTSE 250.


Nicholas Hyett, equity expert at Hargreaves Lansdown, said: "Royal Mail has lost its battle to maintain a location in the FTSE 100. We're not exactly sure that's something you can lay at chief executive Moya Green's door though, as the group continues to face tough market conditions.


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


Shares in Provident Financial, which just recently issued a revenue warning and parted methods with its president Peter Crook, completed 1.68% lower at 891.27 p to value the business 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 go up from the FTSE 250 into the FTSE 100 along with housebuilder Berkeley Group.


All the changes from the evaluation be implemented at the close of company 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 car hire group, miner Petra Diamonds and building and construction firm Carillion will fall out of the FTSE 250. Those moving 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 marginally higher against the dollar at $1.2931.