Live Markets: Burberry to likely drop out of FTSE 100 next week

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29/08/2024 10:20

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    BURBERRY TO CHECK OUT OF FTSE 100 NEXT WEEK 
    With UK's premier index due for a rejig next week, analysts anticipate luxury firm Burberry
 BRBY.L  to face demotion, owing to the sharp drop in its share price recently.
    Ahead of a reshuffle next week, Richard Hunter, head of markets at interactive investor,
argues that Burberry could be demoted, with its shares now down more than 50% so far this year,
the worst on the FTSE 100  .FTSE  index.
    The luxury group had said back in July that it would report an operating loss for the first
half and miss annual profit forecasts, also scrapping this year's dividend to invest in growth.
    "A slowdown in consumer demand for luxury goods has weighed on the sector, with Chinese
consumers particularly notable by their absence," said interactive investor's Hunter.
    The firm had also sacked its CEO and named former Coach boss Joshua Schulman to replace him.
    Any company falling to or below the 111 position in the UK FTSE index rankings, which is
measured based on market capitalization, is automatically deleted from the FTSE 100. Burberry
currently sits at 144.
    In a note published last week, Susannah Streeter, head of money and markets at Hargreaves
Lansdown, also expected Burberry to lose its position in the FTSE 100.
    Analysts expect insurer Hiscox  HSX.L  to likely graduate to the blue-chip benchmark. 
    The reshuffle will be based on prices as the markets shuts on Tuesday, September 3, with the
announcements made after close of trading on Thursday 4. The changes would become effective on
Monday, September 23.
    The FTSE 100  .FTSE  houses Britain's 100 largest public companies, which global
heavyweights like energy firm Shell  SHEL.L  and lender HSBC  HSBA.L .
           
    (Shashwat Chauhan)
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