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Water company Pennon Group is in the greatest danger of being demoted from the prestigious blue chip index, followed by Morrison Supermarkets
Dr Martens PLC (LON:DOCS) could kick down the door to the FTSE 100 member’s club in next month’s index reshuffle, while fellow newcomer Moonpig Group PLC (LON:MOON) will be expecting congratulations cards for joining the mid-cap index.
The next quarterly rejig of the FTSE indices is due to be announced on Wednesday 3 March, with several changes expected to the upper echelons of the London Stock Exchange’s main benchmarks from newly listed companies and those that have seen their shares rise and fall in recent months.
READ: Dr Martens says IPO was eight times oversubscribed
Boot-maker and retailer Dr Martens is sure to be added to the FTSE 250 index and at almost £5bn is big enough to reach blue chip index too.
It partly depends on whether its share price romper-stomps higher in the coming week and a half, whether others overtake it on the promotion race or if some faltering Footise giants see theirs market valuations slide.
Currently, water company Pennon Group PLC (LON:PNN) is in greatest danger of being demoted from the prestigious index, with a market cap of below £3.9bn, followed by Wm Morrison Supermarkets PLC (LON:MRW) at a bit over £4.1bn and British Land PLC (LON:BLND) at just under £4.4bn.
All three are all outside the list of the largest 100 eligible stocks on the main market of the LSE.
(In fact, the top 100 list also includes several much bigger names that are not yet eligible for addition to the Footsie index, including Hut Group owner THG PLC (LON:THG), which has a standard listing with a weaker corporate governance structure to allow CEO and chairman Mathew Moulding to retain control of the group via a founder share; with standard listing also for giants Wheaton Precious Metals Corp (LON:WPM), Banco Santander (LON:BNC) and South32 Ltd (LON:S32), while two other giants of AIM, Asos (LON:ASC) and Boohoo (LON:BOO), are big enough should they ever choose to step up to the main market.)
Battling Dr Marten’s for a place in the Footsie index are Royal Mail PLC (LON:RMG), engineer Weir Group PLC (LON:WEIR) and Electrocomponents PLC (LON:ECM), which are all within the top 100 on current valuations, with ITV PLC (LON:ITV) hanging about just outside. Irish lender AIB Group (LON:AIBG) has recently changed to a premium listing so is also there or thereabouts at just under £4bn.
The promotion and relegation places are not quite as simple as being in the top 100, with existing constituents demoted automatically if they drop outside the top 110, and automatically replaced by the next in line from the FTSE 250. But companies are guarantee promotion if they climb into the top 90 spots.
Online greetings cards specialist Moonpig, at over £1.4bn, should safely make it into the FTSE 250, where they should be joined by fellow newcomer Bytes Technology Group PLC (LON:BYIT), the core cloud storage and security solutions business spun out from South African parent Altron in December and which has got off to a flyer since then.
Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown, said: ‘’Three newly listed star players are leading contenders to land coveted FTSE positions in the upcoming re-shuffle. Dr Martens is set to stomp into the FTSE 250 but has an has outside chance of taking the next step into the FTSE 100 after a rip roaring IPO. Tech newcomers Moonpig and The Bytes Group have also floated into potential FTSE 250 territory.
“Close to losing its FTSE 100 crown is South West Water owner Pennon Group, which has seen interest trickle away as it sits on a pretty cash pile but lacks a sense of direction. Weir Group has a chance of swimming back upstream to the FTSE 100 as its strategic shift towards mining pays off.”
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