Abrdn exits FTSE 100 for second time in a year
Abrdn has been demoted from the FTSE 100 index for the second time in a year after investors reacted negatively to recent results and asset outflows.
The Edinburgh-based asset manager had been tipped to slip out of the blue chip index with its market value shrinking to just over £3 billion, from £11bn at the time of the merger of Standard Life and Aberdeen Asset Management in 2017.
The company only rejoined the FTSE 100 at the end of last year but its shares have fallen by almost a third since then.
Despite this latest relegation there is talk of it adopting yo-yo status by returning to the top flight quite soon as interest rates fall and the economy picks up.
FTSE Russell, the global index provider, confirmed today that Dechra Pharmaceuticals, Diploma, Hikma Pharmaceuticals and Marks & Spencer Group will be promoted in the latest quarterly review.
Heading to the FTSE 250 along with Abrdn are Hiscox, Johnson Matthey and Persimmon.
Commenting on Abrdn’s exit, John Choong, equity and markets analyst at investing comparison platform, InvestingReviews.co.uk, said: “Given the economic environment, characterised by the Nonetheless, a return for abrdn to the UK’s main index in the near future can’t be ruled out either.
“An improving macroeconomic outlook and falling interest rates over the next year or two could push the shares back up as investor sentiment rebounds.”
On the other changes he said: “It wasn’t so long ago that M&S had SOS emblazoned across its brand, but now it’s back in the big league. Marks and Spencer’s promotion to the FTSE 100 is a testament to the amazing work CEO Stuart Machin and his team have done since taking the reins of the renowned retailer.
“Since taking over as co-CEO with Katie Bickerstaffe in May 2022, M&S shares have rallied from 150p to 224p. The pair have transformed a dying retailer that lost its shimmer into a vibrant and exciting business with plenty of potential. Marks’s spark is back.”
He said Persimmon’s demotion from the FTSE 100 is an “unfortunate consequence of the weakness in the housing market along with the removal of the Government’s Help to Buy scheme, which had been its biggest catalyst over the past few years.”
Persimmon’s market cap fell from its peak of £10.39bn in February 2020 to £3.39bn today as demand for its cheap houses slumped.
“That said, Persimmon’s stay in the FTSE 250 may be shortlived if inflation and mortgage rates continue to moderate in the coming months,” said Mr Choong.