Reshuffle on the cards for FTSE 100 shows 2016’s rough hand
One of the potential winners shows how the right tactics can win in difficult times
One of the stocks most likely to drop off the FTSE 100 and into the FTSE 250 — precious metals miner Polymetal International — has been hit hard by sliding gold prices since Donald Trump won the US presidential election. The return to risk across global markets has eroded gold prices, and hit shares in Polymetal accordingly.
Brexit, the other great political surprise, is also making its presence felt in the relegation zone. Other candidates for the drop include Travis Perkins, the builders merchant and exposed to the domestic UK economy while Intu Properties, the shopping centre owner, also has much to fear from the outlook for constrained consumer spending in the wake of the vote to leave the EU.
The story behind one of the main candidates for promotion shows how careful tactics can win, even if a company is dealt a bad hand.
Smurfit Kappa, the international packaging company, generates significant revenue in two of the worst-performing currencies — sterling and the Mexican peso. But it has been able to offset the impact with what Credit Suisse analysis calls a “higher share of value added packaging sales, cost take-out, [and] quick win capex.’’
The reshuffle will be based on Tuesday’s closing prices.