THE UK’S only listed peer-to-peer lender Funding Circle has been dropped from the FTSE 250 index.
The business lender was among the nine firms that were demoted from the capitalisation-weighted index in the latest quarterly reshuffle, alongside guarantor loans provider Amigo Loans and challenger Metro Bank.
Funding Circle has had a bumpy year since its initial public offering last October. In July it halved its full-year revenue growth forecast due to an “increasing uncertain economic outlook” and a reduction in loan demand.
Its shares were trading at 110.4p as of 3pm GMT, down from a float price of 440p last year.
While some commentators have seen this as evidence of issues within the P2P sector, others have pointed out that macroeconomic conditions have been challenging for all newly-listed companies.
Metro Bank‘s shares have suffered a drop of 83 per cent since the start of 2019. In May the bank raised £375m from investors in order to strengthen its balance sheet.
A note from stockbrokers Goodbody said that Metro’s drop from the index “could have knock-on implications for liquidity of the name and limits the pool of potential investors that can own the name” which could be an important consideration for any future capital raises from the bank.
“Perhaps it will be sold before then,” the note added.
Other firms relegated from the FTSE 250 included former star stockpicker Neil Woodford’s Patient Capital Trust and Marks & Spencer, making room for mining company Polymetal, pharmaceutical business Hikma and engineering firm Meggitt.