Currencies

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Last year the reformist head of China’s central bank convinced his Communist party bosses to give market forces a bigger say in setting the renminbi’s daily “reference rate” against the US dollar. In return, Zhou Xiaochuan assured his more conservative party colleagues that the redback would finally secure coveted recognition as an official reserve currency […]

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Capital Markets

Mnuchin expected to be Trump’s Treasury secretary

Donald Trump has chosen Steven Mnuchin as his Treasury secretary, US media outlets reported on Tuesday, positioning the former Goldman Sachs banker to be the latest Wall Street veteran to receive a top administration post. Mr Mnuchin chairs both Dune Capital Management and Dune Entertainment Partners and has been a longtime business associate of Mr […]

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Banks

Financial system more vulnerable after Trump victory, says BoE

The US election outcome has “reinforced existing vulnerabilities” in the financial system, the Bank of England has warned, adding that the outlook for financial stability in the UK remains challenging. The BoE said on Wednesday that vulnerabilities that were already considered “elevated” have worsened since its last report on financial stability in July, in the […]

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Currencies

China stock market unfazed by falling renminbi

China’s renminbi slump has companies and individuals alike scrambling to move capital overseas, but it has not damped the enthusiasm of China’s equity investors. The Shanghai Composite, which tracks stocks on the mainland’s biggest exchange, has been gradually rising since May. That is the opposite of what happened in August 2015 after China’s surprise renminbi […]

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Financial

Hard-hit online lender CAN Capital makes executive changes

The biggest online lender to small businesses in the US has pulled down the shutters and put its top managers on a leave of absence, in the latest blow to an industry grappling with mounting fears over credit quality. Atlanta-based CAN Capital said on Tuesday that it had replaced a trio of senior executives, after […]

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Categorized | Financial

Travis Perkins and Polymetal to lose out in FTSE 100 reshuffle


Posted on November 30, 2016

Builders’ merchant Travis Perkins and mining company Polymetal face relegation from the FTSE 100 after their recent performances were hit by political events.

The share price of Travis Perkins has dropped 29 per cent since the UK voted to leave the EU in June, as economic uncertainty has sparked concerns among some investors about the domestically focused group’s prospects.

Shares in Polymetal, which owns gold and silver mines, have fallen 20 per cent since Donald Trump’s election as US president on November 8. The stock has tumbled together with the gold price, which has suffered as investors have switched out of the precious metal to return to riskier assets such as equities.

Both Travis Perkins and Polymetal are eligible for potential demotion into the FTSE 250 index as their market capitalisations have dropped, according to indicative positions at the close of trading on Monday. A final decision will be made on the reshuffle after the market closes on Wednesday.

Medical products specialist ConvaTec, one of London’s initial public offering success stories, and Scottish Mortgage Investment Trust are in line for promotion to the FTSE 100 from the FTSE 250.

ConvaTec will automatically be placed in the FTSE 100 as it gains entry into the index following its float, which gave it a market cap of more than £4bn. Newly listed groups have to wait until the quarterly reshuffle to be given a place on one of the FTSE indices.

Scottish Mortgage Investment Trust is an actively managed investment group, which has done well through its investment in technology stocks such as Amazon.

Guy Foster, head of research at wealth manager Brewin Dolphin, said: “We are seeing winners and losers from Brexit and the election of Donald Trump. And these factors will go on influencing the FTSE for some time yet.

Danny Cox, at Hargreaves Lansdown, added: “The Trump election has clearly hit Polymetal with the reversal in the gold price. The prospect for interest rate rises has seen the equity markets move into risk-on mode and that has not helped havens such as gold and bonds.”

Countrywide, which runs Britain’s biggest chain of residential estate agents, is another group facing demotion after its shares have dropped more than 50 per cent following the Brexit vote.

On indicative prices on Monday, Countrywide would fall into the FTSE Small Cap index from the FTSE 250 as its stocks have suffered from worries over the UK property market and changes in stamp duty.