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M&S Could Be Relegated From UK’s FTSE 100 Index In A Week

M&S Could Be Relegated From UK’s FTSE 100 Index In A Week
The famed retailer of the United Kingdom, Marks & Spencer could be delisted from the coveted FTSE 100 list within about a week. This fate of the High Street stalwart is because of its the continued and significant drop in its share prices which could throw the company off the top flight of blue-chip firms.
Marks & Spencer is only a few of the companies that have managed to retain a place in the index from the beginning of the index in 1984. 
According to City watchers, the delisting of Marks & Spencer from the index after a period of 35 years can be viewed to be an ‘historic’ moment and a reflection of the decreasing importance of companies of the British High Street.
M&S is not the only household name trying to hold on to its place in the FTSE 100. British Gas owner Centrica, Direct Line, and B&Q owner Kingfisher are among the other companies that are also facing potential drop next week from the index. Also in the line to face possible delisting in the future are Sainsbury’s, Morrisons and ITV.
Every three months, there is a reshuffle in the stock market and the next reshuffle would be based on share prices at the close of business on Tuesday, September 3.
The total current market value of M&S is less than £3.7billion which has put the company right at the bottom of the FTSE 100 list. Its market cap is considerably lower than a number of companies that are in the FTSE 250 index which include gold and silver miner Polymetal which has a total market cap of more than £5billion.
M&S will lose this cherished status on the index unless there is any form of remarkable change in its share price and market capitalization in the next five days of trading.
If the company is indeed thrown off the list, it would be a major setback for M&S chairman Archie Norman and chief executive Steve Rowe, who have been trying to stage a turn around for the company.
The under the latest series of turnaround plans, M&S has roped in TV presenter Holly Willoughby to revamp its tired fashion lines. And for the first time, M&S will have an online food delivery service because of a deal that the company struck this year with Ocado. However these measures have not been able to convince and instill confidence of shareholders in the company because there is significant pressure on the sales and profits of the company. The share price of the company is close to their lowest in almost 20 years.
Last June, M&S managed to shave off relegation. However since then, its stocks have fallen further. The share price of the company is now almost two third less than its value in 2015. Relegation from the FTSE 100 index would also mean funds that invest only in blue-chip stocks would withdraw their investments in the company immediately. This would add on to the woes of the company.

Christopher J. Mitchell

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