The big guns responsible for the FTSE 100 not regaining former glories

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It’s been another day in which the FTSE 100 has had to yield the stage to the FTSE 250.


The senior index, at 7,083, remains just over 10% off its all-time high of 7,877, set on 22 May 2018.


Since the FTSE 100 set its previous high, the FTSE 250 has gained 10.4%; in other words, the FTSE 250 has gained about the same amount, in percentage terms, as the FTSE 100 has lost since its all-time high.


During that period (i.e. from 22/5/18), the FTSE 250 has had some stunning performances from its constituents, such as Future PLC, which is up 675%; Kainos Group Ltd, up 333%; Games Workshop Group PLC, up 326%; Liontrust Asset Management PLC, up 251%; Petropavlovsk PLC, up 211%; Pets at Home PLC, up 200%; and Baillie Gifford US Growth Trust PLC – the FTSE 250’s answer to Scottish Mortgage Trust – up 200%.


The best that the FTSE 100 can manage over that period is the aforementioned Scottish Mortgage Trust, which is up 162%.


The Footsie has some heavily-weighted duds weighing it down. The two worst performers, Rolls-Royce Group PLC (-65%) and British Airways owner International Consolidated Airlines SA (-61%) are both valued at around GBP6.3bn and are not particularly heavy hitters in terms of influencing the direction of the Footsie but the same cannot be said of the three next worst performers:


  • BP PLC, down 50%, with a market capitalisation of GBP59bn;
  • Royal Dutch Shell PLC (“B” shares), down 48%, with a market cap of GBP112bn;
  • and HSBC Holdings PLC, down 46%, with a market capitalisation of GBP81bn

Even so, the FTSE 250 has not been without its dead weights. Its largest stock by market cap, the former FTSE 100 stock Carnival PLC, is down 71% since the FTSE 100’s last peak. Even after that precipitous fall, with a market capitalisation of GBP16.7bn, it is more than two times the size of the next largest constituent, former FTSE 100 stalwart and bid target Morrison (Wm) Supermarkets PLC.


Although some companies, such as Renishaw PLC, the engineering firm that put itself up for sale this year, have not been targeted by bidders with deep pockets, it has been open season on many other UK mid-caps, with two bids today announced – an agreed bid for Meggitt and indicative bid for Sanne.


If that trend continues, the FTSE 250 is likely to keep outstripping its bigger, better-known brother.

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