The widely followed index of the UK’s most valuable listed companies will soon face its quarterly reshuffle in June. Companies whose market valuations have dropped significantly will be ‘demoted’ from the index, replaced by firms who have moved up the rankings as their share prices have risen.
After a tumultuous few months on global stock markets amid the coronavirus pandemic, analysts expect a particularly significant shakeup.
“This reshuffle looks set to be one of the biggest in many years, we expect a minimum of four in, four out – but depending on market moves we could see more,” said Helal Miah, an analyst at the Share Centre.
Russ Mould of AJ Bell agreed, noting the last time four places changed was in 2016 and the last time five places changed was in 2009.
Both analysts flagged budget airline EasyJet, Princess Cruises operator Carnival and British Gas owner Centrica as likely fallers.
“Carnival, easyJet and [aerospace engineering firm] Meggitt may all well find themselves unseated from the FTSE 100 owing to the global viral outbreak,” said Mould.
“All three have seen their businesses suffer to varying degrees thanks to the collapse in international tourism and travel, which in Meggitt’s case has filtered through to the aerospace industry.”
Miah noted Carnival’s shares had tumbled almost 60% since the pandemic rippled through Europe and many cases were diagnosed on its Diamond Princess ship.
EasyJet has had a rough ride too, with virtually all planes grounded and its revenue collapsing amid a wave of refund requests. It recently announced plans to axe up to 4,500 jobs. It only joined the FTSE 100 late last year.
Mould said Centrica had suffered from increased competition, switching by consumers and tougher regulation of energy prices. He added that Avast, Homeserve, GVC and Convatec appeared most likely to make the leap into the FTSE 100.