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 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 evaluation of its constituents, Royal Mail will be relegated to the FTSE 250 along with troubled doorstep lending institution Provident Financial.


The postal service has actually 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 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 value that puts it at 90th location 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 expert at Hargreaves Lansdown, said: "Royal Mail has lost its struggle to maintain 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 deal with hard market conditions.


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


Shares in Provident Financial, which just recently released a revenue warning and parted ways with its primary executive Peter Crook, finished 1.68% lower at 891.27 p to value the business at ₤ 3.1 bn. It will likewise descend to the FTSE 250.


On the other hand, NMC Health, the Abu Dhabi-based hospital operator, will go up from the FTSE 250 into the FTSE 100 along with housebuilder Berkeley Group.


All the changes from the evaluation be executed at the close of company 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 car hire group, miner Petra Diamonds and construction company Carillion will fall out of the FTSE 250. Those moving up to the FTSE 250 include online wagering group 888 Holdings.


On the currency markets, the pound edged up by 0.48% against the euro at 1.0843 euros. Sterling was partially higher versus the dollar at $1.2931.