FTSE 100: Will Bill Ackman’s Pershing Square Join the FTSE This Week?
The FTSE 100 is down by more than 1.22% in premarket trading as investors look ahead to the upcoming reshuffle of the index. It is trading at £6,332, which is slightly below last week’s double-top of £6,483.
There will be no major quarterly or half-year results from any FTSE 100 constituent company this week. The only major companies to release are in the FTSE 250 index. Therefore, focus will be on the reshuffle of the main index.
Analysts expect that Homeserve, a company that does house repairs and improvements will likely be booted from the index. This is despite the fact that the company’s shares have risen by more than 120% in the past five years.
The booted company will likely be replaced by Weir Group, a company that handles large engineering projects. It serves the oil and gas, power, and minerals industry.
Another likely company will be Pershing Square Holdings, which is run by Bill Ackman, the famous Wall Street investor. The hedge fund, which has stakes in companies like Chipotle, ADP, and Hilton, has been among the best performers. It has risen by 60% this year after another 58% gain in 2019, as shown below. The stock has risen by more than 65% this year.
Pershing Square’s returns
A Pershing entry into the FTSE 100 would be a major victory for Bill Ackman, who was struggling just a few years ago after his investments in Valeant and Herbalife soured.
FTSE 100 technical outlook
On the daily chart, we see that the FTSE 100 has been consolidating in the past few days. It has struggled to move above £6,483 and below £6,290. Further, it is also at the same level as the highest level in June and July and slightly above the 25-day and 50-day exponential moving averages. It is also slightly above the 50% Fibonacci retracement level.
Therefore, at this point, the medium-term outlook of the FTSE is neutral, with the key points to watch being the support and resistance at £6,483 and £6,290.