Shopping centre investor Hammerson (HMSO) could be booted out of the FTSE 100 index at next week’s reshuffle and replaced by Royal Mail (RMG), according to analysis of latest market values.

On the FTSE 250, relegation candidates include funeral services group Dignity (DTY), pharmaceuticals expert Vectura (VEC) and real estate group Hansteen (HSTN).

Recent stock market flotations Contourglobal (GLO), which is a power generation business, and food manufacturer Bakkavor (BAKK) look almost certain to go into the FTSE 250 at the reshuffle, given they are both valued in excess of £1.1bn and larger than approximately 100 stocks already in the index.

WHAT ARE THE RESHUFFLE RULES?

A FTSE 100 company can be removed from the blue chip index at the quarterly reshuffle if its market cap is lower than the tenth highest valued company in the FTSE 250.

A FTSE 250 company will be promoted into the FTSE 100 at the quarterly review if it rises to 90th position or above, by market value.

FTSE 100 POTENTIAL CHANGES

Hammerson’s shares have been particularly weak so far in 2018, perhaps as investors digest its all-share takeover offer for rival Intu Properties (INTU) made in December last year.

Royal Mail looks set to return to the FTSE 100 after its share price enjoyed a strong rally amid a breakthrough over pay and pensions, plus a decent trading update on 1 February.

FTSE 250 POTENTIAL CHANGES

Analysis by stockbroker Numis suggest quite a few names could enter the FTSE 250 at the reshuffle.

Promotions could potentially include private equity investor Pantheon International (PIN) and mortgage finance provider Charter Court Financial Services (CCFS) – which is one of Shares’ top picks for 2018 – as well as fantasy toy seller Games Workshop (GAW) and investment trust Baillie Gifford Japan (BGFD).

Potential demotions to the FTSE Small Cap index could include support services group Mitie (MTO), retailer N Brown (BWNG) and transport operator Go-Ahead Group (GOG).

The decisions for the FTSE review will be announced on Wednesday 28 February based on the previous day’s closing prices. The changes will be effective on 19 March.

According to Numis, tracker funds which represent between 8% and 10% of the UK market are more impacted by companies leaving the FTSE All Share altogether than movement between its segments, being the FTSE 100, FTSE 250 and FTSE Small Cap indices.

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