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 completed 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 along with troubled doorstep loan provider Provident Financial.


The postal service has been a FTSE 100 given that soon after being privatised in 2013.


On Wednesday, Royal Mail's shares closed at 390.5 p, offering the postal service a market capitalisation of ₤ 4bn.


A business'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 worth that puts it at 90th location or above, it will sign up with the FTSE 100. If it is up to the 111th position or below, it will be benched to the FTSE 250.


Nicholas Hyett, equity analyst at Hargreaves Lansdown, stated: "Royal Mail has lost its struggle to keep a location in the FTSE 100. We're not exactly sure that's something you can lay at president Moya Green's door however, as the group continues to face difficult market conditions.


"Letter volumes have actually permeated away much faster than the group had actually anticipated, partially as an outcome direct marketing drying up as service self-confidence slumped after the EU referendum, while pricing remains hard in parcels."


Shares in Provident Financial, which recently issued a profit warning and parted methods with its president Peter Crook, finished 1.68% lower at 891.27 p to value the business at ₤ 3.1 bn. It will also descend to the FTSE 250.


In contrast, 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 changes from the evaluation be executed at the close of organization 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 industrial automobile hire group, miner Petra Diamonds and building company Carillion will fall out of the FTSE 250. Those moving up to the FTSE 250 include online betting group 888 Holdings.


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