Soaring energy prices and subdued online trading have helped shape latest changes
Thursday 09 Jun 2022 Author: Martin Gamble

British Gas owner Centrica (CNA) and student property company Unite (UTG) look set to be promoted into the FTSE 100 index following the latest quarterly reshuffle of the blue-chip index. The changes become effective on 20 June 2022.

Firms only get promoted when their size places them inside the top 90 companies by market capitalisation and likewise the demoted stocks need to be below the 110th largest company.

The quarterly reshuffle is closely watched by investors because passive investing has become a bigger influence on markets in recent years.

Passively managed funds which target the FTSE 100 are required to purchase shares in the promoted stocks and sell shares in those demoted. 

It has been a whirlwind couple of years for Centrica which dropped out of the FTSE 100 in June 2020 during the early days of the pandemic when the company also scrapped its dividend.

The shares have gained 259% from their pandemic lows but remain far below the 400p highs of 11 years ago.

The company has benefited from soaring energy prices and in a recent trading update (10 May) said strong trading in the first four months of the year meant it expected to deliver full year adjusted earnings at the top end of analysts’ forecasts.

However, it isn’t all plain sailing for Centrica shareholders as the government ponders a windfall tax on electricity generators.

Lockdown winner Royal Mail (RMG) has seen its shares nearly halve over the last year as the strong trend in online ordering has abated since Covid-19 restrictions were removed.

The company has also struggled with rising costs and warned it would raise prices to counter inflationary pressures after reporting an 9% drop in pre-tax profit for the last financial year ended 27 March.

‹ Previous2022-06-09Next ›