Royal Mail could be sent crashing out of the FTSE 100 next week as insurer Hiscox stakes a claim to replace the UK postal service in the blue chip index.
The final FTSE reshuffle of the year takes place on Tuesday and barring a miracle Royal Mail, which delivered a shock profit warning in October, will drop out of the FTSE 100.
A drop in letter volumes and a fall in expected profit to £500-550m compared with £694m wiped out 20 per cent of Royal Mail's value.
It has since recovered but would need a 12 per cent rise in the coming days to avoid relegation.
Hiscox, winner of insurance company of the year at the City A.M. awards earlier this month, is primed to take Royal Mail's place.
The insurer's share price has more than doubled in the past five years and the company is now valued at £4.8bn.
The firm looks set to come through a difficult period for insurers, who have seen a number of expensive claims after a series of hurricanes and typhoons around the world.
Newcomers Aston Martin and Funding Circle are likely to enter the FTSE 250 after both fell below their IPO price.
“Christmas is Royal Mail's busiest time of year, but the large-scale replacement of handwritten letters with email, means the company will almost certainly lose its place among the premier league of UK-listed stocks at the quarterly index shuffle,” Lee Wild, head of equity strategy at Interactive Investor, said.
Earlier in the quarter energy services company was promoted back into the FTSE 100 after Comcast's takeover of Sky.
AJ Bell investment director Russ Mould said the Hiscox and Royal Mail swap looked “poised” to happen and there was an outside chance of more movement.
He said: “Other names within a few hundred million pounds’ worth of automatic demotion and hoping to do enough to avoid the drop include recent entrant Wood, Rightmove and Just Eat, while those jockeying for promotion include Spirax-Sarco Engineering and life fund consolidator Phoenix Group.”
Elsewhere, Neil Woodford's Woodford Patient Capital Trust is on track to re-enter the FTSE 250.
On the Beach, Premier Oil, Spire Healthcare, Civitas Social Housing and Keller Group could drop out of the FTSE 250.
Thomas Cook's profit warning and subsequent share price drop has left it languishing just above the danger zone for the time being but it could fall out of the FTSE 250 if shares continue to slide.