Marks & Spencer Makes a Return to the FTSE 100 as Hiscox Loses Out in Reshuffle 

Hiscox Ltd.’s short-lived stint in the FTSE 100 Index is coming to an end.

(Bloomberg) — Hiscox Ltd.’s short-lived stint in the FTSE 100 Index is coming to an end.

The insurer has slipped a place in the rankings since being spared in last week’s provisional announcement by index compiler FTSE Russell, and will exit the UK benchmark gauge next month, along with three other stocks.

By contrast, relegation-threatened RS Group Plc survived the cut, after a broker upgrade boosted shares of the company formerly known as Electrocomponents. Its market value of just over 3.5 billion pounds ($4.5 billion) as of Tuesday’s close meant it overtook Hiscox by a tiny fraction.

The Bermuda-headquartered underwriter is being demoted to the FTSE 250 Index only seven months after gaining entry to the blue-chip gauge. Others leaving the FTSE 100 are specialty chemicals maker Johnson Matthey Plc, asset manager Abrdn Plc and homebuilder Persimmon Plc, FTSE Russell said in a statement Wednesday.

The additions to the gauge were unchanged from the provisional review, with Marks & Spencer Group Plc making a return. The retailer will be joined by Hikma Pharmaceuticals Plc and Dechra Pharmaceuticals Plc, along with specialty seals-maker Diploma Plc.

The changes are based on the market capitalization of companies at the close of trading on Tuesday, and will take effect at the start of trading on Monday, Sept. 18.

Hiscox shares have come under pressure this year, with declines accelerating after its first-half results prompted worries over weakening growth at its retail unit.

Demotion from the FTSE 100 could see so-called tracker funds sell the shares to adjust their holdings in line with the benchmark’s allocations. According to FTSE Russell’s guidelines, any stock that falls to 111th position or below is automatically removed from the index, while any that rank 90th or above are added.

RS Group’s place in the index had hung in the balance since FTSE Russell’s announcement of indicative changes. Retaining its position will keep the stock “on the radar for investors who screen for FTSE 100 companies,” said Tom Fraine, an analyst at Shore Capital.

Fraine said RS will further benefit given the long-term increase in passive investing in the gauge as well as the opportunity to hire top talent as a FTSE 100 member.

For Marks & Spencer, regaining its blue-chip status represents the latest sign of the turnaround taking place at the UK retail bellwether. The shares have risen 82% this year as Chief Executive Officer Stuart Machin leads a revival that was confirmed when the company unexpectedly raised its outlook this month.

Diploma’s promotion marks the first time the 92-year-old company has gained entry to the blue-chip index.

Hikma and Dechra are both returning to the FTSE 100 after short absences, though Dechra’s time will likely be short-lived as the pet drug firm is being bought by private equity company EQT AB.

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