Asset managers, pharmaceutical companies and homeware companies are set to be a prominent feature in the FTSE reshuffle on Wednesday due to market volatility and the cost-of-living crisis.
The FTSE quarterly index review will be decided based on next Tuesday's (30 August) closing share prices, with changes ahead of the start of trading on Monday 19 September.
F&C Investment Trust looks set to become just the fourth closed-ended fund in the blue-chip index, joining the likes of Scottish Mortgage Investment Trust, 3i and Pershing Square.
The F&C trust was the first of its kind when it launched in 1868 as the Foreign & Colonial Government Trust, the same year as the last public execution in the UK, when it sought £1mln for a fund investing in a spread of 18 foreign government bonds or fixed interest stocks.
F&C has experienced a 10% uptick in its share price across the last six months as it has been aiming to secure long-term growth in capital and income from an international portfolio of listed equities.
Another promotion hopeful is wound care specialist ConvaTec Group PLC (LSE:CTEC), making a return after dropping out of the index in 2017.
Temporary Home
Homeserve PLC (LSE:HSV) has been tipped to temporarily catapult into the FTSE 100, before it is soon taken private, replacing cyber firm Avast PLC (LSE:AVST) following the expected completion of its takeover.
The home repair insurance company will jump back into the top-flight earlier than the official reshuffle as it fills the place vacated by Avast when it is taken over by US cyber giant NortonLifeLock.
But Homeserve's time in the index will be fairly limited as it, in turn, awaits a takeover by Canada’s Brookfield.
Relegation candidates
Asset manager Abrdn PLC (LSE:ABDN) and generic medicines maker Hikma Pharmaceuticals PLC (LSE:HIK, OTC:HKMPF) are deemed at risk of relegation from London's top-flight index.
Hikma slashed its guidance for revenues and margins in its key genetics medicines division, while Abrdn recently fell into the red after a tough half for markets.
Howden Joinery Group PLC (LSE:HWDN) is another top contender for demotion from the top-flight as the cost-of-living crisis continues to bite, yo-yoing back down after only joining the blue-chip index earlier in the spring.
Its value has plummeted 27% in the previous six months, having climbed during the pandemic as consumers focused on household renovation schemes in the absence of spending on holidays and other leisure pursuits.
Fellow home-improvement companies Tyman (LSE:TYMN), the door and window firm, and Made.com Group PLC (LSE:MADE), the furniture seller, are also looking set for relegation from the FTSE 250 and FTSE All-Share indices, respectively.
More promotion hopefuls
Tipped for promotion into the FTSE 250 are PureTech Health (LSE:PRTC, NASDAQ:PRTC, OTC:PTCHF), the producer of the first ADHD prescription treatment delivered through a video game, which could return to the FTSE 250 following a short three-month hiatus.
It has jumped 9.6% in the last six months, through still down 14% since the beginning of the year.
Videndum PLC (LSE:VID), a provider of premium branded hardware products and software solutions to the growing content creation market, and renewable energy investment trusts NextEnergy Solar Fund Ltd (LSE:NESF) and Bluefield Solar Income Fund (LSE:BSIF) are expected to gain promotion to the mid-cap division.
Videndum’s share price soared after its half-yearly results showed sales were up 23% on last year and pre-tax profits rose 9%.
“Vloggers and social media influencers have taken the video content market by storm, and Videndum’s film accessories like green screens, camera stabilisers, autocues and lighting kits are in demand, as are its cloud-based live streaming solutions,” said analyst Susannah Streeter at Hargreaves Lansdowne.
NextEnergy, meanwhile, in the past week posted a record net asset value after making a hike in its power price assumptions, having also received a recent boost as its sustainability credentials were recognised under new European regulations.
BlueField Solar has also seen its net asset value rise.
In the last six months, NextEnergy and BlueField shares have leapt 20% and 13% respectively.