Royal Mail will need a miracle to avoid relegation from the FTSE 100 Index tomorrow, as insurer Hiscox looks ready to step into its place as a blue chip firm.
The winners and losers of the last FTSE reshuffle of the year are to be announced tomorrow afternoon, with Thomas Cook, Kier Group and the AA also among those facing the drop.
Royal Mail’s share price has more than halved since its peak in May, and remains well below its 2013 initial public offering (IPO) price of 330p.
Most of the change has been driven by a shock October profit warning plus a fall in letter volumes that saw communications watchdog Ofcom voice its concerns about the company’s long-term sustainability last week.
Meanwhile Hiscox, winner of insurance company of the year at last month’s City A.M. awards, looks ready to benefit from Royal Mail’s woes as the only company eligible for promotion to the FTSE 100.
The insurer's share price has more than doubled in the past five years and has ridden out a difficult period for insurers, who have been hit by several expensive claims after a series of hurricanes and typhoons struck globally.
Elsewhere, Kier Group is set to tumble out of the FTSE 250 after a troubled year for outsourcers hit the construction giant hard.
Kier’s misery on the stock market has been so acute in recent weeks, culminating in the group announcing a rights issue on Friday that has swung a 39 per cent wrecking ball at its share price.
Thomas Cook is also facing the chop from the second tier of the FTSE index, with shares nose diving more than 50 per cent after last week’s £30m profit warning. The beleaguered package holiday provider blamed its troubles on the summer heatwave hitting its main trading period.
It could be better news for Small Cap companies Aston Martin and the Restaurant Group, both of whom are eligible for entry into the FTSE 250.
Aston Martin’s hotly anticipated debut on the stock market came in October in a listing which saw the luxury carmaker valued at £4.3bn. But its shares have fallen by a quarter since then, raising doubts about whether it will move up a gear on the index.
The Restaurant Group recently acquired Wagamama, but the deal left a sour taste for investors, with its share price losing 14 per cent since the takeover.
The final decision will be announced after market close tomorrow, taking companies positions at the end of today's trading as indicators of who should go up or down.