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 ended 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 together with struggling doorstep lending institution Provident Financial.


The postal service has been a FTSE 100 business given that shortly 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 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 evaluation.


If a group has a value 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 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 sure that's something you can lay at primary executive Moya Green's door though, as the group continues to deal with tough market conditions.


"Letter volumes have permeated away faster than the group had expected, partially as a result direct drying up as service self-confidence dropped after the EU referendum, while rates stays hard in parcels."


Shares in Provident Financial, which just recently provided a profit warning and parted methods with its primary executive Peter Crook, ended up 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 medical facility operator, will move up from the FTSE 250 into the FTSE 100 together with housebuilder Berkeley Group.


All the modifications from the evaluation be carried out at the close of business 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 commercial vehicle hire group, miner Petra Diamonds and construction company 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.