02nd March 2020

FTSE100 reshuffle - March 2020 - interactive investor comment

Richard Hunter, Head of Markets at interactive investor, commented “The recent whipsawing performance of the FTSE100 has thrown a number of companies into the mix for the reshuffle – and even these could change over the next day.


The reshuffle is due to be announced on Wednesday, based on the closing prices from 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 NMC Health, TUI and, struggling on the cusp, Kingfisher.


Even within these current market capitalisations, Kingfisher could marginally survive (standing at 110th largest quoted company), TUI’s recent travails given the coronavirus will certainly mean relegation unless there is a sharp improvement in fortunes overnight, while NMC – a bolt-on candidate for relegation given its latest market capitalisation of around £2 billion – has muddied the waters with its stock being 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, (asset manager) Intermediate Capital Group, (gaming company) GVC Holdings and (utility) Pennon Group. These four FTSE250 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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