LONDON (Reuters) - British broadcaster ITV <ITV.L> is set to be expelled from the FTSE 100 <.FTSE> blue-chip index after its shares have fallen by about 60% this year, hit hard by an advertising slump triggered by the coronavirus crisis.
Index manager FTSE Russell placed ITV on its "indicative FTSE 100 deletions" list on Aug. 26 and said it would make a final announcement on Wednesday, based on the data collected at Tuesday's close.
ITV's market capitalisation, by far the weakest in the benchmark index, amounts to 2.4 billion pounds ($3.19 billion) and is smaller than those of dozens of companies in the mid-cap FTSE 250 index <.FTMC>.
Given the huge valuation gap between ITV and its FTSE 100 peers, there is little doubt the broadcaster will be demoted to the FTSE 250.
Retailer B&M European Value Retail <BMEB.L>, worth 4.7 billion pounds on the London stock market, was indicated as the only likely entrant to the FTSE 100 by FTSE Russell.
ITV, the UK's biggest free-to-air commercial broadcaster, this month reported a 43% decline in advertising revenue in the second quarter. That fuelled a 17% decline in external revenue in the first six months of the year.
Advertising revenue in July was down 23%. While that represented an improvement from the 42% drop in June, the outlook remains uncertain, ITV said.
The broadcaster, the studios unit of which produces popular dramas such as "Coronation Street" and "Emmerdale", did not provide financial guidance for the year.
"The COVID-19 pandemic limits the company's ability to create and show new content and thus attract advertising, although the longer-term trend of competition from streaming services and rival broadcast technologies is a huge factor as well", Russ Mould, an analyst at broker AJ Bell, said in a note last week.
Shares in ITV were not trading on Monday because of a UK public holiday but closed at 60.72 pence on Friday.
(Reporting by Julien Ponthus; Editing by David Goodman)