FTSE Reshuffle Could Prompt Scramble For Stock

Tracker funds are set to pile into Hargreaves Lansdown if, as expected, the investment adviser is promoted to the FTSE 100 today in the index’s quarterly reshuffle.

According to yesterday’s closing prices, Hargreaves, which last year produced only £160 mn ($260 mn) in sales, is poised to join the UK index of blue chips, reports the FT’s Alphaville blog.

Given that Hargreaves is an illiquid stock – the free float only recently rose to 50 per cent after some director sales – there is likely to be a scramble for stock, notes Alphaville. From the blog:

Based on that 50 per cent assumption, Citi reckons trackers will need to buy 5.6 mn shares – the equivalent of 6.3 times average daily volume!

Good luck with that.

Source: Alphaville

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