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FTSE 100: Ackman’s Pershing Square Set to Be Next Footsie Constituent

The FTSE 100 is set to open lower a day after the UK became the first country to accept the vaccine developed by Pfizer. It is also falling a day after FTSE Russell made its highly-anticipated reshuffle that pushed Homeserve out and Pershing Square in. Perhaps, the index is falling because of the overall strength of the pound and uncertainties about Brexit.

As we predicted on Monday, Pershing Square Holdings, which is run by Bill Ackman was elevated to the Footsie yesterday. The firm, which manages about $17 billion will officially enter the index on December, 18. This has happened after the strong rally in the stock, which is up by more than 60% this year.

It has been a good year for the company. Early this year, it made more than $2.7 billion from an insurance investment of just $26 million.

Its holdings like Chipotle, Hilton, and Restaurant Brands have also rallied, pushing the total returns to 62%. That’s from a 58% increase in 2019. Further, Ackman has also raised billions of dollars through a SPAC known as Pershing Square Tontine.

Pershing Square Holdings share price

During the reshuffle, Homeserve, which provides home renovation solutions left the FTSE 100 and headed to the smaller FTSE 250. Other firms that entered the FTSE 250 are Elementis and Hammerson while Fisher & Sons and Scottish Investment Trust left the index.

Meanwhile, the Footsie is also reacting to the latest news on Brexit. While Boris Johnson has offered concessions on fisheries, the gap between the EU and the UK is substantially high. This raises chances that the UK will leave the EU without a deal.

FTSE 100 technical outlook

Looking at the Footsie daily chart, we see that nothing has changed from my yesterday’s update. The index remains between the 50% and 61.8% Fibonacci retracement levels. It is also inside the bullish flag pattern that is shown in black. Further, it is above the 50-day and 25-day EMAs. Therefore, there is a possibility the index will have a bullish break-out in the next few weeks.

Footsie technical chart

FTSE 100