Monday, Dec 10, 2007
Wonder who will pay for this?
Guardian: Rock shares face further hits on ejection from FTSE 100
Northern Rock this week faces a mass sell-off by shareholders if as expected the stricken bank is ejected from the list of top 100 companies on Wednesday. FTSE tracker funds, led by Legal & General, will sell their holdings in the Rock when it stops being a member of the FTSE 100. It is estimated almost 10% of the bank is owned by passive tracker funds that have remained invested in the bank despite its value falling from more than £5bn to about £430m this year.
Posted by inbreda @ 09:20 AM (257 views) Add Comment
1 Comment
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1. jack c said...
From nebusiness.co.uk - "Northern Rock is almost certain to be ejected from the FTSE 100 after seeing its share price dive by more than 85% to just 103p following revelations that it had agreed emergency funding with the Bank of England. But the group should avoid the ignominy of being catapulted straight into the small cap index.The bank is currently valued at around £430m, a far cry from its peak of more than £5bn in February this year, but probably enough for it to rank towards the bottom end of the FTSE 250 mid-cap index, rather than being relegated straight into the FTSE Smallcap Index.Analysts said the shake-up provided evidence that companies across the board were being hit by the credit crisis".
This can be likened to a Premiership football team being relegated to the 2nd division and in such circumstances would the manager and his backroom staff still be in place - I think not !!