THE FTSE 100 reached 40 years of age yesterday — but experts are questioning if it is still a relevant force.
The UK’s biggest stock market index arrived in January 1984 at a time when traders still gave instructions in big mobile phones.
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Being included in it still has merit as it ranks the most valuable listed UK companies and it means firms get an instant lift from tracker funds that follow it.
But in a world where most share trading is now done by computer algorithms, the index’s reputation is under question.
David Buik, at Core Spreads, said: “The FTSE 100 no longer acts as a barometer of the UK economy. It is very much an international index, with 60 per cent of its earnings being dollar or euro denominated.”
The anniversary also highlighted its underperformance against international peers — with a return of just 5.2 per cent since its start.
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This is largely because many gains were erased in the dotcom crash.
One reason credited for struggles is a dearth of tech stocks, typically highly valued in the US.
Charles Hall, from Peel Hunt, said: “It is striking that the value of the entire UK market of £2.4tn is similar to the value of Apple. For a global investor, calling the performance of Apple is as important as calling the UK market.”
Just 14 have survived with the same name since 1984 — including Tesco, Unilever and Barclays.
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There are 12 more companies that have remained, but with a different name.
Education publisher Relx, previously Reed Elsevier, has been named best performer over the 40 years.
A £100 investment in the eighties would have made £35,493. The worst performer is NatWest, with £100 returning just £312.
Before the FTSE 100 there was the FTSE 300, established in 1935.
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Success a family business
FOLLOWING in the family footsteps is the most trodden route to becoming an entrepreneur.
Two-fifths of Brits who have started their own business are the children of entrepreneurs, according to a survey of more than 1,200 firms by the 2023 UK StartUp Awards and Starling Bank.
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More female than male founders have been inspired by a parent — 42 per cent compared to 36 per cent.
Children of business owners are more likely to be exposed to business ideas, challenges and opportunities.
Meanwhile, entrepreneurial parents may be more willing to give their children a helping hand setting up a business.
A fifth of start-ups were funded by parents, according to wealth manager Charles Stanley.
Around 85 per cent have relied on the founder’s own personal capital to launch a business while only one in ten of start-ups took out a bank loan to get started.
Ryanair’s agency removal
BUDGET airline Ryanair has said it will report lower passenger numbers after travel agent sites, such as Booking.com, stopped listing its flights.
The Irish carrier said large online travel agent sites, including Booking.com, Kayak and Kiwi removed Ryanair’s flights from their websites.
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Ryanair said the sites only made up a fraction of its sales, but it would increase empty seat numbers by between 1 and 2 per cent this month.
The airline still welcomed its removal from what it called “pirate” sites and suggested it was from consumer protection agency pressure or in response to a ruling against screenscraper Flightbox.
Boss Michael O’Leary previously launched legal action against Booking.com.
Mr O’Leary accused the sites of overcharging and providing fake data.
Ryanair said it would “still make its fares available to honest travel agents” which “do not add hidden mark ups”.
HSBC in rate cut
HSBC has become the first big bank to offer a mortgage below 4 per cent.
After mortgage rates hit 6 per cent last year, lenders are cutting mortgage rates in expectation that the Bank of England will cut interest rates.
HSBC is offering rates as low as 3.94 per cent.
It has also cut its two-year fixed deal to 4.49 per cent.
Meanwhile, the average two-year fixed has dropped again to 5.92 per cent, according to Moneyfacts.
Top earners at FTSE
THE top FTSE 100 bosses will have earned as much by 1pm this afternoon as the average worker makes in an entire year, according to the High Pay Centre.
The average FTSE 100 salary is currently £3.8million, 109 times an average worker’s full time pay.
Activist betting on Entain
THE company that owns Ladbrokes has bowed to pressure and appointed an activist shareholder to its board.
Entain said Ricky Sandler, who runs US outfit Eminence Capital, would be a non-executive director.
It comes just weeks after bookie boss Jette Nygaard- Andersen stepped down after a 35 per cent slump in the company’s valuation during her three-year tenure.
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Mr Sandler had written a scathing letter to Entain’s board in June accusing the company of pursuing an “empire building, shareholder value-destroying” strategy.
Mr Sandler yesterday said he would be working with the company to “help Entain achieve long-term success and lasting value”.
