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 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 been a FTSE 100 company given that shortly 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 company'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 place 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.


Hyett, equity expert at Hargreaves Lansdown, said: "Royal Mail has lost its struggle to keep a location in the FTSE 100. We're uncertain that's something you can lay at president Moya Green's door though, as the group continues to deal with hard market conditions.


"Letter volumes have actually leaked away much faster than the group had actually anticipated, partially as a result direct marketing drying up as service self-confidence dropped after the EU referendum, while prices remains difficult in parcels."


Shares in Provident Financial, which recently provided an earnings caution and parted ways with its president Peter Crook, completed 1.68% lower at 891.27 p to value the business at ₤ 3.1 bn. It will also descend to the FTSE 250.


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


All the changes from the evaluation be carried out at the close of service 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 business automobile 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 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 greater versus the dollar at $1.2931.