FTSE reshuffle: Burberry set for ejection but easyJet flies away from relegation
- Burberry set for relegation from the FTSE 100 to the FTSE 250.
- easyJet toescape ejection from the FTSE 100 as passenger numbers stay robust.
- Hiscox set for promotion from the FTSE 250 to the FTSE 100
- Raspberry Pi is expected to join the FTSE 250 following its successful IPO.
- Diversified Energy Co looks set to be relegated from the FTSE 250 to the FTSE Small Cap.
The FTSE All Share Index Review is based on prices at the close on Tuesday 3 September and will be announced later by FTSE Russell. Changes will come into effect after the close of business Friday 20 Sep.
Susannah Streeter, head of money and markets, Hargreaves Lansdown:
‘’Luxury brand Burberry is set to lose its financial lustre, with its time in the topflight coming to an end based on Tuesday’s closing prices. Burberry has had a checkered recent past, slipping up on the style stakes, with revenues falling at double digit rates in the first quarter. The road ahead doesn’t look any easier and the dividend has been suspended as the company attempts to bolster its balance sheet to deal with its current issues. It’s unsurprising that aspirational shoppers have been showing caution in an uncertain economic climate. The costs of refreshing the store estate have also been onerous and it will take time for Burberry’s brand elevation to reap rewards. Turning things around from here is a tough task for the new CEO, Joshua Schulman. His his experience at brands such as Michael Kors, Coach, and Jimmy Choo should help Burberry build back up its brand desirability, but this is likely going to take considerable investment and patience.
easyJet has flown away from the relegation zone, helped by a strong summer of bookings and robust passenger numbers reported by its rivals. There had been some fears that there would be a slowdown in demand with customers starting to baulk at paying higher prices. But with Wizz Air and Rynair setting monthly passenger records in August, sentiment has revived around the budget airline sector.
Shares in Hiscox were given a boost amid speculation of bid interest from Japan’s Sompo Holdings Inc and Italy’s Assicurazioni Generali Spa. Both are believed to have been considering a potential , according to reports. Although a lack of formal announcement saw shares dip back, sentiment has still been lifted around the insurance group, particularly given the 8.3% rise in insurance contract written premiums in the first quarter. This has helped give the company a leg up and now it looks set to climb into the top flight.
Raspberry Pi shares soared on the company’s stock market debut, and with investor sentiment still relatively strong around its prospects, the firm looks set to secure a sweet spot in the FTSE 250. The company’s initial aim was to provide IT that was affordable for young people to own and explore with confidence, giving them the chance to discover computing. Customers are now using its single-board computers in a variety of applications across a broad range of markets, and the computers are more efficient to manufacture than legacy desktop and embedded PCs, consuming 90% less electricity. Raspberry Pi now manufactures computer modules for industrial clients, involved in the ‘Internet of Things’ sector – creating devices with sensors, processing ability, software and other technologies that connect and exchange data over the internet. There is now much excitement about the technology’s potential as so called ‘edge computing’’ takes off – when data is processed closer to where its created, making things work more quickly. However, with plenty of pretenders to its tiny throne, Raspberry Pi will have to work hard to stay at the front of the race.
Diversified Energy Company plc is an oil and gas producer operating in the Appalachian Basin and the Central Region in the US. The company has been on an acquisition spree, most recently snapping up several operated natural gas wells located within East Texas. But this has increased the debt pile and investor sentiment has been knocked as oil prices have declined, hitting lows not seen since December 2023. Its deteriorating performance looks set to see it relegated from the FTSE 250 to the FTSE Small Cap.
