FTSE 100 reshuffle: Close race for seat at the top table
With time running out to win blue-chip status, our head of markets looks at the runners and riders.
2nd March 2020 11:36
by Richard Hunter from interactive investor
With time running out to win blue-chip status, our head of markets looks at the runners and riders.
The recent whipsawing performance of the FTSE 100 has thrown a number of companies into the mix for the latest quarterly reshuffle – and even these could easily change over the next 24 hours.
The reshuffle is due to be announced on Wednesday but is based on the closing prices on Tuesday and, at this stage, it is difficult to call with certainty which stocks will enjoy promotion and suffer relegation.
At this precise moment, the stocks most likely to be relegated are Middle East healthcare provider NMC Health (LSE:NMC), holiday operator TUI (LSE:TUI) and, struggling on the cusp, B&Q-owner Kingfisher (LSE:KGF).
Even within these current market capitalisations, Kingfisher could marginally survive (standing at 110th largest quoted company), but TUI’s recent travails, given the coronavirus, will certainly mean relegation unless there is a sharp improvement in fortunes overnight.
Source: TradingView Past performance is not a guide to future performance
NMC – a bolt-on candidate for relegation given its latest market capitalisation of around £2 billion – has muddied the waters though. Its stock was suspended last week, although our understanding is that, if necessary, when the reshuffle becomes effective on 23rd March, the last available price will be used, therefore condemning NMC to the drop.
The picture is not much clearer in terms of potential promotions, in that there are currently four stocks vying for what would be three available places.
As things currently stand, this is likely to go to a photo finish between miner Fresnillo (LSE:FRES), asset manager Intermediate Capital Group (LSE:ICP), gaming company GVC Holdings (LSE:GVC) and utility Pennon Group (LSE:PNN).
These four FTSE 250 constituents each have a market cap of approximately £4.6 billion, so the next 24 hours will likely have implications for all of these stocks, especially since market volatility is showing few signs of subsiding.
This could mean that the March reshuffle results in the most competitive race for a seat at the top table in some considerable time.
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