Royal Mail will make a triumphant return to the FTSE 100 when Britain’s blue-chip index is reshuffled this month.
The latest shake-up, due to become effective from June 21, will be based on yesterday’s closing prices.
It means the postal service is set for automatic promotion following a huge rally in its shares during the pandemic.
Happy returns: The postal service is set for automatic promotion following a huge rally in its shares during the pandemic
Royal Mail’s stock closed 2.6 per cent, or 15.2p, higher at 593.8p last night.
At the same time, engineering giant Renishaw is set for demotion to the FTSE 250 index of mid-sized companies. The firm’s shares dipped 0.3 per cent, or 15p, lower to 5520p yesterday.
Other entrants to the FTSE 250 could include newly-listed tech firms Moonpig, Trustpilot, Auction Technology Group and Darktrace.
But companies that missed out on the chance for promotion to the FTSE 100 include the commercial broadcaster ITV, which had been considered an outside contender by analysts. To secure automatic promotion from the FTSE 250 to the FTSE 100, a company must be the ranked the 90th most valuable overall, or higher.
Meanwhile, FTSE 100 firms that fall below 110th in the rankings put themselves on course for demotion.
Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown, said: ‘The FTSE reshuffle won’t see the top flight move much with only Royal Mail likely to be delivered a coveted FTSE 100 seat. But there is some significant movement on the lower deck with changes to the FTSE 250.
‘The new arrivals are likely to include newcomers like Moonpig, Darktrace and Trustpilot, which have all flown on to the London market in recent months.’
Royal Mail’s return to the prestigious FTSE 100 index crowns a roller-coaster year for the firm.
The shares crashed to a record low of 124.3p in April 2020, as global stock markets were roiled by the coronavirus pandemic.
But the price then recovered as lockdown restrictions turbocharged demand for internet shopping – and parcels. That helped provide Royal Mail to record sales of £12.6billion for the 12 months to March 31 and bumper profits of £730m, quadruple the previous year’s.
Overall, the stock has now rallied more than 300 per cent higher since its low last year.
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