HRG facing relegation in FTSE 100 reshuffle
08 September 2010 09:27
Argos and Homebase parent Home Retail Group is facing relegation from London's blue chip share index as part of the latest FTSE 100 reshuffle.
The FTSE Group confirmed the retailer was among those heading for the exit after seeing its shares plunge by more than 25% since the beginning of May.
The quarterly review is based on tonight's closing prices and will be confirmed tomorrow after scrutiny by the FTSE committee, to take effect after the market close on September 17th.
Those blue chip stocks that have fallen to below 111th place in the top tier are at risk of being kicked out each quarter.
Home Retail Group's stock market woes come after it delivered a dismal first-quarter trading update as consumers reined in spending in the run-up to the election. However, it staged a fightback earlier this week when broker Seymour Pierce urged clients to stop selling the retailer.
Analyst Freddie George said he expected Home Retail to reveal that sales and margins have improved in recent months when it updates the market on Thursday.
While the comments helped shares lift a little, it was only a brief respite as the stock closed in the red again today, down 2%.
The company has bounced between the FTSE 100 and 250 in recent years, although its latest stay in the top flight dates back to December 2008.
The stocks on their way out are likely to be replaced by Glasgow engineering firm Weir Group, and Resolution, the investment vehicle of insurance guru Clive Cowdery which owns Friends Provident and recently bought Axa's UK life business.
Engineering group Tomkins may also enjoy a temporary spell in the top flight after agreeing a £2.9 billion takeover last week.
Online grocer Ocado is set to join the FTSE 250 after its float in July, despite having a troubled start to life as a listed company.
The firm delivered its inaugural trading update to the stock market today, but shares remained under pressure - down 7% - after a smaller-than-expected rise in third-quarter sales.
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