FTSE reshuffle: Who’s in and who’s out of London’s blue-chip index?
In this FTSE reshuffle several firms have achieved promotion, while others only just missed out. At the same time, relegation beckoned for some of the FTSE 100’s worsts performers.
FTSE Russell, which runs the index, decide who’s up and who’s down according to closing prices yesterday, with changes effective from 19 March.
Weir Group and Renishaw have th emost to smile about today, with the two engineering firms jumping into the premier blue-chip index.
So who’s out of the FTSE 100 and who just missed out on a place?
TUI
It has been almost a year since the tour operator was booted out of the FTSE 100 as Covid-19 devastated the global travel industry.
Even though the vaccine roll-out continues apace and evidence exits of pent-up demand for holidays, it hasn’t boosted the company enough to allow it to climb back into the blue-chip index and it will remain in the FTSE 250.
“TUI is still going to have to play a long game of catch-up but investors appear much more optimistic about the seasons ahead,” Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown said.
Shares in the travel operator have climbed 1.4 per cent this morning.
Weir Group
Weir Group, the Glasgow based engineering firm, has also benefited from the vaccine roll-out and has managed to re-join the FTSE 100.
Its decision to focus on mining rather than oil and gas has also proven to be a wise one as commodity prices are forecasted to rise in 2021 as demand grows for precious metals and minerals.
“The irony here is that Weir’s return to the big league would owe much to a decision to slim the company down, through the sale of its Oil & Gas operations to America’s Caterpillar, and decision to focus on mining equipment,” Russ Mould, AJ Bell’s investment director said.
Morrisons
Morrisons has been on the edge of relegation for a while and today slipped into the FTSE 250 as the supermarket has struggled to capitalise on the shift to digital sales.
It means that Morrisons faces its second spell out of FTSE – the last time was in 2016.
However, the supermarket underdog has delivered a 13.9 per cent rise in sales over the last three months and has converted 300 McColls convenience stories into Morrison Daily stores.
This could boost revenues in the future and Morrisons has a historical record of climbing back into the FTSE 100 quite quickly.
Dr Martens
The shoe company recently completed a well-executed IPO and has a healthy market capitalisation of £4.84 bn.
Dr Martens was considered a potential contender for the FTSE 100 but has instead been forced to settle for the FTSE 250 instead.
The company has seen e-commerce rise in importance throughout the pandemic, with online sales accounting for 30 per cent of overall sales in the nine months to the end of December.
Pennon Group
The South West water owner has struggled to recover after it disposed of its recycling business Viridor for more than £4 billion.
The company has been able to offset a decline in income from closed business with an uptick from households.
However, the region is dependent on tourism and without a quick return of visitors, Pennon Group has little opportunity to increase its revenue elsewhere. As a result, its share price has come under pressure and it has been relegated to the FTSE 250.
The Bytes Group
The IT solutions and services company recently undertook an IPO in December after 38 years of sustained growth.
The lisiting was part of Bytes’ de-mergre for its South African parent company Altron. The company has benefited from the shit to homeworking and will likely continue to capitalise on that trend.
With a market capitalisation of around £989 m it placed comfortably in the FTSE 250.