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 review of its constituents, Royal Mail will be relegated to the FTSE 250 together with struggling doorstep lending institution Provident .


The postal service has actually been a FTSE 100 business because quickly after being privatised in 2013.


On Wednesday, Royal Mail's shares closed at 390.5 p, providing the postal service 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 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, said: "Royal Mail has 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 hard market conditions.


"Letter volumes have actually leaked away quicker than the group had expected, partially as a result direct marketing drying up as service confidence slumped after the EU referendum, while rates stays difficult in parcels."


Shares in Provident Financial, which recently issued a revenue caution and parted methods with its president Peter Crook, ended up 1.68% lower at 891.27 p to value the business at ₤ 3.1 bn. It will also come down to the FTSE 250.


On the other hand, NMC Health, the Abu Dhabi-based healthcare facility operator, will go up from the FTSE 250 into the FTSE 100 in addition to housebuilder Berkeley Group.


All the modifications from the evaluation be executed 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 industrial vehicle hire group, miner Petra Diamonds and building and construction company 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 partially greater versus the dollar at $1.2931.