Thu, 2nd Mar 2017
The latest reshuffle of the FTSE 100 saw Dixons Carphone and Capita demoted, to be replaced by Rentokil Initial and Scottish Mortgage Investment Trust. Easyjet and Intu Properties just managed to escape demotion. The changes to the marketplace will take place at the close of business on the 17th March.
The demoted firms are ones whose market capitalisation puts them below 110th place in the listings. The change is mostly symbolic, but it does have an effect on some tracker funds, which will sell their shares to pick up the companies that are joining the FTSE 100.
Dixons Carphone fell victim to a Brexit-related sell-off, and has failed to reassure its investors that it will be able to bounce back, as consumer spending is expected to slow down over the next several months. Dixons Carophone’s demotion shows the concern that investors have over consumer confidence as the Brexit looms, and also highlights the ongoing battle between retailers and online stores.
Scottish Mortgage is the third investment trust that has made it into the UK’s leading index, following a year which saw its share price climb by around 40 percent. Rentokil Initial is another business that has enjoyed strong profits. It is well-known for its pest control service, and investors have been jumping on the stock because it has enjoyed six consecutive increases in dividends. It is now squarely back in top flight.
Just 30 of the companies that were a part of the FTSE 100 when it was launched are still in it today. Of the rest, 39 were acquired by other firms ten have been broken up, and three have gone bankrupt.