21st Nov 2023 18:33
(Alliance News) - Intermediate Capital Group PLC is set to rejoin the FTSE 100 Index at the next quarterly reshuffle, but Hargreaves Lansdown PLC's time at the top table could be coming to an end, after a 12 year run.
A number of departures from the FTSE 250 are also expected, according to indicative changes from index operator FTSE Russell on Tuesday.
Intermediate Capital Group looks set to be heading back to FTSE 100 after a year on the sidelines. The private-equity fund manager has enjoyed a strong 2023 with shares climbing 32%, taking its market value to GBP4.48 billion.
Last Wednesday, it reported an increased net asset value and profit in its latest half year, and said it expects further progress going forward. Analysts have been quick to praise the firm, highlighting exposure to structurally growing private debt/credit markets and a diverse fundraising pipeline.
But Hargreaves Lansdown's 12-year stretch in the blue-chip index could be coming to an end. The investment services firm has come under pressure as banks and other investment providers compete for deposits and regulators’ vow to ensure savers receive "fair" rates of interest.
Earlier in November, analysts at UBS highlighted how new fair-value assessment rules announced in May, could leave Hargreaves facing fee cuts associated with higher consumer duty and clearer standards of consumer protection. The Swiss bank said Hargreaves' "premium pricing looks increasingly unjustified versus similar product range, quality and customer service at lower-cost competitors."
Its share price has reflected those concerns, falling 18% in the year to date, taking its market value down to GBP3.38 billion.
Over to the FTSE 250, and Asia Dragon Trust PLC is likely to be promoted with a current market value of GBP577.6 million. The investor in Asian equity markets has had a mixed year, but has risen 4.8% in the last month alone on hopes that economic recovery can be sustained in China.
Halfords Group PLC is expected to ride back into the mid-cap index with shares up 7.3% in the year to date taking its market value to GBP504.9 million. The cycle and car retail and repair specialist has been the subject of a reported merger approach from Redde Northgate. Halfords management are understood to have dismissed the nil-premium proposal believing it undervalues the firm.
Hochschild Mining PLC looks to have struck gold with an expected promotion to the FTSE 250 after a sparkling 2023 which has seen shares rise 45%. The gold and silver miner with operations in Peru, Argentina and Brazil now has a market value of GBP557.2 million.
Finally, Tullow Oil is expected to be promoted to the FTSE 250. The oil and gas explorer and producer has seen shares advance 12% in the last month taking its market value to GBP543.1 million. Last Wednesday, it raised free cash flow guidance and agreed a USD400 million debt facility with Glencore Energy UK Ltd, part of Glencore PLC which it said was a "material step in our refinancing strategy."
Expected to leave the FTSE 250 are William Hill owner, 888 Holdings PLC; recently listed cross-border payments and foreign exchange firm, Cab Payments Holdings PLC; UK, Germany, and France-focused commercial property investor, CLS Holdings; and asset management outfit, Liontrust Asset Management PLC.
The quarterly FTSE index review is based on changes to market capitalisation and sees those FTSE 250-listed stocks that are the 90th biggest or larger in the main market move up, and FTSE 100 companies that are 111th biggest or smaller move down, keeping the indices balanced.
The index changes will be announced after the market close next week Wednesday, based on closing prices from a day prior.
Re-indexing can lead to increased trading activity, as fund managers with tracker portfolios need to offload stocks that no longer sit in the index and buy the stocks that move in.
By Jeremy Cutler, Alliance News reporter
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