May 29, 2019 / 11:04 AM / 6 months ago

BUZZ-UK bluechip stocks: AJ Bell names winners and losers

(Adds Hargreaves comment on M&S)

** Investment platform AJ Bell says JD Sports Fashion and AVEVA could enter London’s bluechip index in June reshuffle

** “JD Sports Fashion and AVEVA look certain to enter the FTSE 100 and the issue now is which firms will make way for the latest members of the UK’s elite corporate index,” says Russ Mould, investment director at AJ Bell

** Mould says easyJet (-2.1%) and Marks and Spencer (-0.8%) are the most likely candidates for relegation to the FTSE 250

LIKELY ENTRANTS IN Q2 2019

** AJ Bell says JD Sports has defied the wider UK high street doom and gloom

** British industrial software company AVEVA developed its market position with a complex merger with France’s Schneider that effectively doubled the company’s size

“HOVERING OVER THE TRAPDOOR”

** Mould says Just Eat, Hikma Pharmaceuticals , Sainsbury, Direct Line and DS Smith are “hovering over the trapdoor”

** The stocks fell between 1% and 3.5% on Wednesday

** British budget airline easyJet currently has the smallest market cap of any firm in the FTSE 100 at around 3.6 bln stg, so it could be the first to go, AJ Bell says

** Another year of falling sales and profits, along with a dividend cut, has not helped M&S, AJ Bell says, adding that a demotion would be the first time the company drops out since the launch of the index in 1984

** Hargreaves Lansdown analyst Laith Khalaf, however, says M&S may avoid relegation, thanks to an extra 601 mln stg of capital raised through a rights issue

** Hikma is “teetering on the brink” after the drugmaker’s failure to meet analysts’ forecasts with its annual results - AJ Bell

** Investors are still wondering what to make of Just Eat’s prospects, AJ Bells says

** Sainsbury faces strategic questions following the collapse of its proposed merger with Asda

** Direct Line has been dogged by fears over price competition in the car insurance market

** At DS Smith, investors have focused on fears of packaging oversupply coming out of China and the debt accumulated by the firm (Reporting by Noor Zainab Hussain in Bengaluru)

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