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 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 alongside struggling doorstep lender Provident Financial.


The postal service has actually been a FTSE 100 company because 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 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 .


If a group has a worth that puts it at 90th place 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 expert at Hargreaves Lansdown, said: "Royal Mail has lost its battle to maintain a place in the FTSE 100. We're unsure that's something you can lay at chief executive Moya Green's door though, as the group continues to deal with hard market conditions.


"Letter volumes have actually seeped away much faster than the group had actually expected, partly as a result direct marketing drying up as company self-confidence plunged after the EU referendum, while prices stays difficult in parcels."


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


In contrast, NMC Health, the Abu Dhabi-based medical facility operator, will move up from the FTSE 250 into the FTSE 100 together with housebuilder Berkeley Group.


All the changes from the review be implemented at the close of company 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 commercial lorry hire group, miner Petra Diamonds and building 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% versus the euro at 1.0843 euros. Sterling was marginally greater against the dollar at $1.2931.