Royal Mail Leaves The FTSE 100 In Quarterly Shake-up

30 August 2017
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The FTSE 100 closed greater 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 loan provider Provident Financial.


The postal service has actually been a FTSE 100 company since quickly 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 evaluation.


If a group has a worth that puts it at 90th place or above, it will join the FTSE 100. If it is up to the 111th position or listed below, it will be demoted to the FTSE 250.


Nicholas Hyett, equity expert at Hargreaves Lansdown, said: "Royal Mail has actually lost its battle to keep a location in the FTSE 100. We're unsure that's something you can lay at primary executive Moya Green's door though, as the group continues to face difficult market conditions.


"Letter volumes have seeped away quicker than the group had expected, partially as a result direct marketing drying up as dropped after the EU referendum, while prices remains tough in parcels."


Shares in Provident Financial, which recently released a revenue caution and parted methods with its president Peter Crook, ended up 1.68% lower at 891.27 p to value the company at ₤ 3.1 bn. It will also 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 together with housebuilder Berkeley Group.


All the modifications from the evaluation be carried out 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 commercial vehicle 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 greater versus the dollar at $1.2931.