FTSE is an abbreviated form of Financial Times Share Index. FTSE 100 can simply be termed as a cluster of top 100 companies listed upon London Stock Exchange based upon their market capitalization. These firms structure the basis of options and futures exchanged in the London International Financial Futures Exchange (LIFFE). FTSE is popularly known as “footsie”. There are certain relegation rules to be upheld if one needs to be part of the FTSE list. For example-
A company will naturally be relegated from the FTSE 100 list in the event that it falls underneath 111th spot among qualifying organizations on the London Stock Exchange, or if an organization on the FTSE 250 rises to 90th position or above. FTSE reshuffles companies on quarterly basis and focuses on top 110 players to avoid constant fluctuations as the shuffling phenomena in the FTSE 250 is on daily basis.
Marks and Spencer (M&S) Group Plc is a multinational retailer with its headquarters in Westminster, London. It caters to lifestyle and food markets.
Marks & Spencer has been a founder member of the FTSE 100 for 35 years since its commencement in 1984. But it surpassed relegation in June, yet the stocks continued to degrade further since. This caused loss of 2/3 of the value to Marks & Spencer.
There had been an assumption that retailer could fall off the “blue chip” list. This speculation escalated as Marks & Spencer stated a 10% fall in the annual gains in the previous week, which caused the firm loss of GBP 400 million of its value.
This founder members’ 40% value has gone astray since January 2018. Marks & Spencer, a British Highstreet symbol struggled challenges in not only clothing, but also in the food industry, predominantly in the online market.
Marks & Spencer has been placed at 112 rank by FTSE 350 within mid-large-scale enterprises as of 30 August’s market capitalization. Marks & Spencer shares detoriated 17% wince the beginning of June whilst they further fell 1% on 2 September and were mulling at the base of FTSE’s 100 index.
That automatically triggered booting out for Marks & Spencer as per the relegation rules. On expectations, the 135 old brand and FTSE’s 100 founder associate will fall out of London’s blue-chip stock market for the very first time. This will have a double effect on the brand as funds that are directed towards blue chip stocks inevitably sell their sales.
Marks & Spencer, with a market capital share of something less than GBP 3.7bn which placed it at bottom of FTSE 100 and behind a few companies from FTSE 250.
For instance, at present there were four players ahead of Marks & Spencer, namely : Merlin Entertainments GBP 4.6bn, Meggitt with 4.8bn, Hikma Pharmaceuticals at GBP 5.0bn and Polymetal’s GBP 5.4bn. in terms of capitalization. Three of which are currently anticipating automatic escalation in FTSE’s 100, with Hikma 85th and Meggitt 90th, leading them all at 79th largest on the London Stock Exchange.