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FTSE Reshuffle - Entrances and Exits

With Royal Mail having lost out on its FTSE 100 place by the skin of its teeth, FTSE Russell have confirmed that we’ll be seeing two set of moves in the FTSE 100 and three in the FTSE 250 this time round.

FTSE 100

Demotion New Entrants
Provident Financial NMC Health
Royal Mail Berkeley Group

FTSE 250

Demotion New Entrants
Northgate Sequoia Economic Infrastructure Income Fund
Petra Diamonds Alfa Financial Holdings
Carillion 888 Holdings

Nicholas Hyett, Equity Analyst, Hargreaves Lansdown:

"Royal Mail has lost its struggle to maintain a place in the FTSE 100. We’re not sure that’s something you can lay at CEO Moya Green’s door though, as the group continues to face tough market conditions. Letter volumes have seeped away faster than the group had expected, partly as a result direct marketing drying up as business confidence slumped after the EU referendum, while pricing remains tough in parcels.

Long term we think Royal Mail is better positioned than many operators to weather those headwinds, and the international business is proving surprisingly successful. But throw in a dose of uncertainty over the pension scheme and potential industrial action, and it’s easy to see why some of the shine has come off the shares.

Relegations for Carillion and Provident Financial will come as no surprise. Both have plummeted following eviscerating profits warnings, largely of management’s own making. Carillion fell foul of the outsourcers’ kryptonite, bidding too aggressively for contracts that ultimately proved loss making. Meanwhile Provident managed to botch an organisational revamp to such an extent that a 137 year old business, which was robustly profitable last year, is now facing losses of up to £120m."