Royal Mail Leaves The FTSE 100 In Quarterly Shake-up

30 August 2017
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The FTSE 100 closed higher on Wednesday, but 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 lender Provident Financial.


The postal service has actually been a FTSE 100 business since shortly 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 determined 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 join the FTSE 100. If it is up to the 111th position or below, it will be benched to the FTSE 250.


Hyett, equity analyst at Hargreaves Lansdown, said: "Royal Mail has lost its struggle to keep a place in the FTSE 100. We're uncertain that's something you can lay at chief executive Moya Green's door however, as the group continues to face tough market conditions.


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


Shares in Provident Financial, which just recently released a revenue warning and parted methods with its primary executive Peter Crook, finished 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 health center operator, will go up from the FTSE 250 into the FTSE 100 along with housebuilder Berkeley Group.


All the changes from the evaluation be implemented at the close of organization on 15 September and will take result from the start of trading on 18 September.


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


Northgate, the business lorry hire group, miner Petra Diamonds and construction company Carillion will fall out of the FTSE 250. Those going up to the FTSE 250 include 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 partially higher versus the dollar at $1.2931.