Marks & Spencer Group Plc is set to regain its place in the UK’s FTSE 100 Index, ending a four-year absence from the country’s main stock benchmark.
(Bloomberg) — Marks & Spencer Group Plc is set to regain its place in the UK’s FTSE 100 Index, ending a four-year absence from the country’s main stock benchmark.
The retailer is one of four companies provisionally earmarked by index compiler FTSE Russell for inclusion when changes to the blue-chip gauge are made next month.
Others that stand to be promoted from the midcap FTSE 250 index are Hikma Pharmaceuticals Plc, Dechra Pharmaceuticals Plc and specialty seals-maker Diploma Plc, FTSE Russell said on Tuesday. They are set to replace industrial conglomerate Johnson Matthey Plc, asset manager Abrdn Plc, housebuilder Persimmon Plc and electronic-components maker RS Group Plc, it said. Final changes will be announced after European markets close on Aug. 30, based on Aug. 29 closing prices.
“These are moving all of the time, so nothing is set in stone,” said Russ Mould, investment director at AJ Bell.
For M&S, regaining its FTSE 100 spot will represent the latest sign of the turnaround taking place at the UK retail bellwether. The shares have risen 77% this year as Chief Executive Officer Stuart Machin leads a revival that was confirmed when the company unexpectedly raised its outlook last week.
Machin’s progress is in contrast to the struggles of previous management teams, which led to the stock losing its FTSE 100 place for the first time in 2019.
Winning back its spot in the index would provide a further boost to the shares as so-called tracker funds would have to buy them in order to replicate the performance of the gauge.
For Diploma, promotion will mark the first time the 92-year-old company has gained entry to the blue-chip index.
Hikma and Dechra are both on the cusp of returning to the FTSE 100 after short absences, though Dechra’s time will likely be short-lived as the pet drug firm is being bought by private equity company EQT AB.
For Persimmon, its exit from the gauge would mark the end of a decade-long stay, following a rough year which saw the company lose it’s crown as the UK’s largest listed homebuilder.
RS Group’s potential relegation hangs in the balance: the stock rose 4% on Tuesday thanks to a BNP Paribas Exane upgrade, taking its market capitalization to £3.4 billion ($4.3 billion), just above that of insurer and fellow FTSE 100 member Hiscox Ltd.
The changes will take effect at the open on Sept. 18, according to FTSE Russell, which reviews index membership every quarter.
–With assistance from Damian Shepherd and Lisa Pham.
(Updates with preliminary changes from FTSE Russell throughout, RS Group market value overtaking Hiscox in penultimate paragraph)
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