The UK’s largest online estate agent, Rightmove, could see itself ejected from the FTSE 100 next week, after its share price slumped over the summer.
Next week sees the quarterly rebalancing of this stock market index of the largest companies in the UK.
The downturn in house prices in London and the South East, coupled with increased competition from the likes of Zoopla and Purple Bricks has seen a decline in Rightmove’s share price which puts it in “pole position” to drop out of the FTSE 100, according to The Share Centre.
The Share Centre’s investment research analyst Helal Miah says: “The company has had a tumultuous year. The share price reached a high in May on the back of merger and acquisition activity in the estate agency sector.”
This led to its being elevated into the FTSE100. But a slump in share prices since then leaves it in a ‘vulnerable position’ according to Miah.
He adds: “A weak housing market in London and the South East and what the group describes as ‘muted sentiment towards the UK property market’ continues to weigh [on its share price].”
However, despite this share price slump, the estate agent has reported an increase in both profits and revenue year-on-year.
The slowdown in the housing market has impacted other listed companies in this sector, including Countrywide and Hoxtons. Other listed companies tipped to drop out of the FSTE100 include Direct Line, Royal Mail and Marks and Spencer.