Yahoo Finance Security firm G4S to secure FTSE 100 promotion
The world’s largest security services firm, G4S, is about to reclaim its place in the FTSE 100, when the positions of the index constituents are reviewed later this week.
Using Thursday’s closing prices, the London Stock Exchange said the FTSE 250 security firm was eligible for promotion.
G4S, which entered the FTSE 100 in 2007, was relegated to the FTSE 250 in December 2015 after it suffered severe damage to its reputation in the UK for a number of botched contracts, including the 2012 London Olympics.
Earlier this month, investors piled into the mid-cap stock, propelling it to an all-time high after it reported a 9pc rise in first-quarter revenue thanks to new contract wins. Underpinned by a strong start to the year, shares have risen by almost 40pc.
The index shake-up could also mean industrial developer Segro and housebuilder Berkeley entering the FTSE 100, which leaves Intu Properties, Hikma Pharmaceuticals and Royal Mail facing relegation.
Hikma’s possible demotion comes exactly a year after it was promoted. Shares have plunged by more than 25pc since mid-March after US regulators decided not to approve its generic version of GlaxoSmithKline’s blockbuster lung drug Advair.
The June annual review of the FTSE All-Share constituents differs from the usual quarterly reshuffle as all stocks are screened for liquidity, as well as market capitalisation.
Colin Farley, of Cantor Fitzgerald, said: “The FTSE All-Share annual review in June performs a liquidity screen across all stocks in the universe, as well as narrowing the buffer zones to create a more accurate snapshot of the premium segment of the UK stock market.
“The quarterly reviews have wider buffer zones to reduce unnecessary turnover in the index.”
Mr Farley, who conducted a preliminary review of the FTSE All-Share constituent positions, sees significant changes to the constituents of the FTSE 250 ahead of the review, with retailers AO World and Debenhams, alongside Allied Minds and Keller facing demotion. Sirius Minerals, Coats Group and Melrose are among those expected to join the mid-cap index following the annual reshuffle.
Meanwhile, budget airline Flybe is at in danger of falling out of the small-cap index, he said.
The cut-off date for the quarterly review is Tuesday May 30 and an official decision will be made the following day.
