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Shell to stay in the FTSE as it ends dual share class structure

by LLB Reporter
15th Nov 21 11:40 am

The FTSE 100 made a tepid start to the week on Monday despite some positive economic news from China.

A lot of the noises from the world’s second largest economy have been negative of late so the better-than-expected data on industrial output and retail sales understandably earned some applause from Asian markets.

“The next big economic release comes on Wednesday in the form of UK inflation figures which could reignite investors’ concerns about rising prices,” said AJ Bell investment director Russ Mould.

“The London market was bolstered by the news Royal Dutch Shell is casting off its dual-share structure but unlike BHP and Unilever is not threatening divorce and has instead committed itself to the UK and remaining in the FTSE 100 index.

“The better comparison is with Unilever – which like Shell has Dutch and British roots. The consumer goods giant ended up being brought back from the brink of a move to the Netherlands in the face of angry protests from shareholders.

“It turns out Shell didn’t need to have its feet held to the fire, and it will remain a key constituent of the FTSE as it tidies up its complex A + B share structure.

“Most of us will be mightily sick of the pandemic by now, but for Serco there has been a silver lining as it upgraded forecasts thanks to Covid-19 related work running for longer than expected.

“More telling for the company’s transformation away from the ugly duckling of a business of a few years ago is how much of this work is translating as free cash flow.”

 

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