Hiscox's Impending FTSE 100 Entry Amid Market Surge

Hiscox, a prominent (re)insurer, is ready to move to the UK’s FTSE 100, and this shift may imply a remarkable development in terms of the stock’s visibility and investor’s interest. It is not surprising that the firm’s potential rise comes amid the impressive performance of the onshore equities, such as the FTSE 100 that has surged by nearly 8% year-to-date and increased by 12% from a January low, which means that it may become the best year for the index since 2009. At the same time, Burberry has not demonstrated similar success and its stocks fell by half over the year to hit a 14-year low. Thereby, the timing on such investments is always the key question, as well as the question of whether Burberry went out of fashion and whether it should be compared to other companies from the market of luxury goods, such as LVMH reported.

Not surprisingly, in terms of Hiscox’s proximity to the level of the FTSE 100, the market analysts, such as Susannah Streeter from Hargreaves Lansdown, suggest, “its inclusion [the FTSE 100] could well act as a catalyst for the stock”. On the other hand, it is complicated to identify undervalued shares, especially when it comes to a record high-level index. At the same time, the new companies on the market, such as Burberry, do not bring successful returns to investors, as their shares have crawled back in the final quarter of the year. It raises the question of the necessity to invest in such a company and the question of whether its brand has already gone out of fashion is quite timely. In the context of Hiscox, its movement to the FTSE 100 will boost its statuses as a prestigious and watched company, which will affect its strategic choices and image-elevation strategies. It is not surprising that these implications are reinforced by the market dynamics and its continuous rise.