Ocado Nabs Spot In FTSE 100 As Traditional Retailers Shrink
Online grocer and technology company Ocado entered Britain's index of biggest companies on Wednesday in a quarterly reshuffle of the FTSE 100 which clearly showed the zeitgeist in a disrupted retail industry.
Ocado was promoted from the mid-cap FTSE 250 to the FTSE 100 in a quarterly reshuffle by index provider FTSE Russell that also saw bookmaker GVC promoted.
Ocado's shares rocketed 44 percent on the day the firm struck a major deal with U.S. supermarket Kroger. The stock is up 124 percent year-to-date thanks to a string of distribution deals cheered by the market.
A new environment for retail, with consumers shopping online for everything from clothes and groceries to baby accessories, was the clear driver behind this quarter's reshuffle, which was based on the companies' market capitalisation at the close of trading on Tuesday.
Ocado's market cap has ballooned to £6.1 billion, overtaking that of several FTSE 100 companies and triggering the promotion.
Getting into the FTSE 100 can often fuel further demand for a company's shares, since funds that track the FTSE or invest in the index can then add that stock to their portfolio, while the inverse is true if a company falls out of the FTSE 100.
High street retailer Marks & Spencer, whose shares are down 5.5 percent this year with a market cap of £4.86 billion, escaped demotion from the index by a whisker.
Ocado had overtaken it in terms of market capitalisation, but M&S was saved from the brink by security company G4S and South African private healthcare provider Mediclinic , whose smaller size meant they were relegated instead.