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 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 company considering that 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 company's location in the FTSE 100 or FTSE 250 is figured out by its market capitalisation at the close of on the day of the review.


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


Nicholas Hyett, equity expert at Hargreaves Lansdown, said: "Royal Mail has actually lost its battle to preserve a location in the FTSE 100. We're unsure that's something you can lay at president Moya Green's door however, as the group continues to face tough market conditions.


"Letter volumes have actually permeated away quicker than the group had actually anticipated, partly as a result direct marketing drying up as business self-confidence slumped after the EU referendum, while prices stays hard in parcels."


Shares in Provident Financial, which recently provided a profit caution and parted ways with its president Peter Crook, ended up 1.68% lower at 891.27 p to value the company at ₤ 3.1 bn. It will likewise descend 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 together with housebuilder Berkeley Group.


All the modifications from the review be executed at the close of company on 15 September and will take impact from the start of trading on 18 September.


The FTSE 250 closed 88.67 points up at 19,616.56.


Northgate, the commercial lorry hire group, miner Petra Diamonds and building firm Carillion will fall out of the FTSE 250. Those going up to the FTSE 250 consist of 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.