FTSE rejig set to spell demotion for Provident Financial

The FTSE reshuffle will be confirmed after the market closes today. Picture: Matt Morton/PA Wire

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Embattled firms Provident Financial and Carillion are set to face demotion in today's stock market reshuffle after seeing their shares slide amid trading woes.

The latest quarterly review is expected to see sub-prime lender Provident Financial booted out of the FTSE 100 Index following last week’s spectacular share losses.

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Shares in the group tumbled by 66 per cent last Tuesday in one of the FTSE’s biggest one-day falls after it warned over heavy losses following a period of “substantial under-performance”.

The calamitous week also saw its chief executive Peter Crook resign and Provident admit regulators were investigating products sold by its Vanquis banking arm.

Shares have recovered some of the ground lost, but likely not enough to save it from relegation to the FTSE 250 Index when the FTSE Russell EMEA Committee confirms the results of the review after market close today.

Provident is on course to be replaced in the premier share league by United Arab Emirates-based healthcare provider NMC Health, with the reshuffle based on last night’s closing prices.

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Construction firm Carillion is another stock due for disappointment in the review as it looks to be downgraded to the small cap index after a shock profit warning in July wiped almost £600 million from its stock market value.

Chief executive Richard Howson also stepped down last month as the group said it would need to bolster its balance sheet and was struggling to stay within its borrowing limits.

The group has failed to stage a shares turnaround despite brighter news since then that it has been named as one of the builders of the controversial HS2 rail line, while also securing two government contracts worth £158m.

Online gambling group 888 Holdings is among small cap stocks waiting to be promoted to the FTSE 250 in the review. But retailer Dixons Carphone looks set to avoid relegation for now, despite last week’s share price tumble after a shock profit warning.

The group’s stock fell by nearly a quarter on Thursday after it flagged that soaring costs for new mobile phones means people are holding on to older models for longer. Its shares have now nearly halved after a difficult past year.

Under the FTSE reshuffle, companies listed on the UK stock market are reviewed four times a year and moved among the indices based on their market capitalisation.

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