- Winners and losers announced in reshuffle of FTSE indexes
- A fall in market volatility is good for some investors, but bad for CMC Markets
- JD Sports’ attempt to grab a bigger slice of the booming sneaker market is challenged again by the competition regulator
FTSE reshuffle confirmed
Wm Morrison (MRW) and Meggitt (MGGT) are joining the big league.
FTSE Russell confirmed yesterday that both the supermarket group and the defence company will be promoted to its FTSE 100 index, after separate takeover bids for both businesses sent their shares rocketing. They will take the places of Just Eat Takeaway.com (TKWY) and Weir Group (WEIR), but will soon be delisted if the buyouts go ahead.
FTSE Russell emphasised that its quarterly reviews of the FTSE 100 and FTSE 250 indexes, which come into effect later this month, were “impartial” and “rules-driven”. But the reasons for certain inclusions and exclusions, which will affect any investor in FTSE tracker funds, have some market observers asking questions. Our piece today explains some of the contentions. OT
Lower market volatility is bad news for CMC
CMC Markets (CMCX) released a trading update detailing subdued trading activity through July and August, although overall volumes remain ahead of pre-pandemic levels.
The spread betting and CFD specialist said that business had slowed due to reduced levels of volatility in global markets, while client income retention has been “moderately below” the targeted 80 per cent rate. Indeed, the CBOE volatility index - Wall Street's fear gauge – is well down on its March 2020 peak, as government stimulus measures and global vaccination programmes reduce near-term market anxieties.
If existing conditions prevail through the remainder of 2021, the group expects that FY 2022 net operating income will settle in a range between £250-280m.
The news sent CMC’s shares tumbling by a quarter in early trading. MR
Regulator challenges JD Sports’ Footasylum takeover – again
For JD Sports (JD.), teenage kicks are proving hard to get.
The UK competition regulator announced today that it is once again challenging the group’s £90m takeover of Footasylum, a popular footwear retailer among young consumers, after an initial attempt to block the merger was quashed last year.
The Competition and Markets Authority said that after gathering further evidence, it was still concerned that the merger could result in Footasylum customers facing higher prices, fewer discounts and less choice of products.
But JD Sports boss Peter Cowgill said he was “perplexed and disappointed” by the decision, after the company successfully appealed the last attempt to block the acquisition. At the time, it argued that JD Sports and Footasylum were in fact facing greater competition from suppliers like Nike (US:NKE) and Adidas (DE:ADS). These footwear giants have been boosting their own retail businesses, as companies scramble to grab a slice of the rapidly growing market for sneakers – now the go-to fashion item for teenagers around the world. OT
