Edinburgh-based investment giant Abrdn and Glasgow-based global engineering and mining group Weir Group, two of Scotland’s biggest companies and employers, are currently strong contenders to return to the FTSE 100, according to Hargreaves Lansdown.
The FTSE All Share Index Quarterly Review will be based on market capitalisations on Tuesday, November 29.
Abrdn has a current stock market value of about £4.2 billion, with its shares having risen more than 50% to around £2.03 from a low of around £1.33 last month after the firm was demoted from the FTSE 100.
Weir has a current stock market capitalisation of around £4.6 billion. Its shares have risen about 19% in the past month to around £17.85.
Susannah Streeter, senior investment and markets analyst Hargreaves Lansdown, said: “Volatile markets and concerns about the prospects for global growth are the headwinds driving changes in the FTSE 100.
“Investor risk appetite appears to be returning despite the uncertainty ahead, which is helping the fortunes of Arbdn, which was relegated to the FTSE 250 at the last reshuffle but could return soon return to the top flight …
“It’s been a volatile year for Abrdn, the Edinburgh based investment company, as shares were dragged down amid the financial market volatility.
“Outflows from its funds caused nervousness among investors and it was ejected from the FTSE 100 at the last review.
“But in recent weeks the company appears to have turned a corner, helped by a rising appetite for risk sending its share price sharply upwards and putting it in pole position for promotion back into the top flight.
“Investor confidence in sectors around the world has jumped over the past month, and that’s helped restore optimism about the company’s prospects, particularly given that it’s known for its emerging markets and smaller companies’ funds.
“A bolstered direct-to-consumer offering, and improved proposition are all welcome developments which could also help deliver an about turn in revenues.
“But the company will have to generate sustained and meaningful inflows to remove the risk of fresh volatility returning to the share price.”
On Weir Group, Streeter said: “Weir Group, the Glasgow based engineering firm, is also a close contender for re-entry to the FTSE 100.
“It took the opportunity to refocus on mining during the pandemic, moving away from the oil industry.
“Its share performance has been a little volatile as worries about global growth and the ongoing effects of China’s zero-Covid policy have continued.
“However, optimism appears to be returning that its strategic move into mining will pay off over the longer term, and its recent results were resilient, showing strong demand from the sector for its equipment, with order numbers up by almost a fifth over the last quarter.
“Maintaining its full-year revenue and profit guidance is not to be sniffed at in the current market.”