When the opening bell rings for the FTSE100 today, Britain’s main index will look somewhat different. The stock exchange is due for a re-shuffle.
As investors well know, the values of stocks are ever-changing as sentiment soars and sinks. Thanks to competition, capitalism and disruption, stock exchanges around the world often need to press the ‘Refresh’ button on their stock standings to make sure only the most valuable firms hold membership. For London’s FTSE100, last night it was confirmed…
Departures: Budget airline EasyJet is on its way out. Rising fuel costs and Brexit risks to flying rights tell the story of EasyJet’s decline. Cheerio. And thanks to a last-minute twist, retailer Marks and Spencer survive the drop.
Arrivals: JD Sports will take EasyJet’s place, hitting the big leagues for the first time after finding rare success on the high street. JD primarily sell sportswear.
And This Matters Because:
1. Macro readings will stay on point. With these 100 blue chips representing 81% of the value of British business, updating the list is to update a popular macro marker of the country’s commercial strength.
2. Forced buying and selling are upon us. Passive index funds designed simply to track the FTSE100 will be forced into heavy volumes of buying and selling. With the rise of passive investing, this could move stocks.
3. And clout. JD is a part of the elite now. Insiders will no doubt feel the buzz of their newfound status, allowing them to recruit top new talent to the firm.
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