Supermarket Morrisons and controversial security firm G4S in danger of relegation from FTSE 100 as index comes up for renewal
Supermarket Morrisons and controversial security firm G4S are in danger of relegation from the FTSE 100 list of Britain’s biggest companies as the index comes up for renewal.
Morrisons has been languishing near the bottom of the list for several months, narrowly avoiding relegation in the last quarterly review.
At the close of business on Friday the supermarket chain, whose shares have almost halved in value over the past two years after competition from discount firms and management woes, was just above the cut-off point for exclusion.
Loser: Security firm G4S, which bungled its 2012 Olympics contract, is near the bottom of the FTSE 100
G4S, the outsourcing group that bungled the security contract for the London 2012 Olympics leading to troops being drafted in to supplement its staff, was also close to relegation on Friday. Both G4S and Morrisons are worth just under £4 billion at Friday’s closing prices.
FTSE bosses will carry out their quarterly update of the indices soon. The smallest of Britain’s blue-chip companies measured by market capitalisation will be dropped to the FTSE 250. The rankings are key since stock market rules oblige institutional investors to invest a proportion of their funds in the UK’s biggest companies.
Banking and asset management giant Investec and housebuilder Berkeley Group were on course for promotion, while aerospace firm Meggitt and engineering company Weir looked set to be dropped.
Gold miner Randgold could also go down if its share price falls further, after tumbling from £56 a share earlier this year to £39 on Friday.
Doorstep lender Provident Financial could be promoted.
Companies are relegated if their value falls below that of the 110th largest company, and are promoted if they reach 90th by market cap.
Other companies can be promoted or relegated if they are pushed up or down by other companies meeting the exclusion or inclusion rules for the FTSE 100.
The London Stock Exchange will say on Tuesday who is on course to be promoted or excluded, according to the latest market prices.
The final decision will be made a week later, on the basis of closing prices on Tuesday, September 8. A committee will meet the next day to approve the changes.
Morrisons is set to release half-year results on September 10, with its house broker Shore Capital saying that profits could be down by 25 per cent.
Profits are expected to come in at £135 million for the six months to the start of August, compared with £181 million for the same period last year.
The big grocers are suffering from competition from discounters and from falling prices.
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