Are these 2 FTSE 100 stocks a good buy before the budget? - Kalkine Media

October 25, 2021 03:27 PM BST | By Suhita Poddar
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Highlights 

  • Tobacco company Imperial Brands estimates its FY 2021 group net revenue will increase by around 1 per cent.
  • Scottish Mortgage Investment trust’s 1-year NAV performance stands at 39.4 per cent, as of 30 September.

The FTSE 100 index rose on Monday, ahead of the upcoming budget, which will be presented by the chancellor of the exchequer, Rishi Sunak, later this week, on 27 October.

However, as per the recent research from a fund flow and allocation data firm EPFR, UK focused equity funds has seen an outflow of US$ 9.4 billion in 2021 so far due to rising inflation concerns and deepening supply chain issues.

The data also found that the funds which are benchmarked against the FTSE 100 index also saw an outflow this month.

The FTSE 100 index constituents mostly comprise of energy, consumers and resources sector, whose revenues come mostly from outside of the UK, while it also includes rate-sensitive stocks such as financial stocks and others, which can be impacted by changes to the interest rate.

Let us take a look at the investment prospects of 2 FTSE 100 index listed stocks and how they have performed:

  1. Imperial Brands PLC (LON: IMB)

Imperial Brands is a UK based multinational tobacco company and is the 4th largest tobacco company in the world.

The company’s group net revenue is set to rise by about 1 per cent based on organic and a constant currency rate due to ongoing strong tobacco pricing rates.

Moreover, due to a reduction in losses in its Next Generation Products (NGP) business and improving performance in its distribution business segment, the group estimates its underlying operating profit to be in line with expectations, increasing between low to mid-single digits range in FY 2021.

The group also expects it is on track to meet its FY 2021 guidance. Imperial Brands is expected to report its FY 2021 results next month on 16 November.

IMB’s share price and volume

(Image source: Refinitiv)

Imperial’s shares were trading at GBX 1,579.50, down by 0.16 per cent on 25 October 21 at 11: 47 AM BST. Meanwhile, the FTSE 100 index was trading at 7,238.97, up by 0.48 per cent.

The company’s market cap stands at £14,972.18 million, and its 1-year return is at

21.46 per cent as of 25 Oct. 21.

  1. Scottish Mortgage Investment Trust PLC (LON: SMT)

Scottish Mortgage Investment Trust is one of the largest UK based investment trusts and is managed by investment management firm Baillie Gifford & Co Ltd.

The trust’s cumulative fair net asset value (NAV) stands at 1397.68 pence per share as of 22 October. The trust’s one-year NAV performance is at 39.4 per cent, compared to a benchmark of 22.7 per cent, as of 30 September.

SMT’s share price and volume

(Image source: Refinitiv)

Scottish Mortgage’s shares were trading at GBX 1,454.00, up by 1.08 per cent on 25 October 21 at 13: 03 hrs BST. Meanwhile, the financial services sectoral index was trading at 12,274.24, down by 1.13 per cent.

The company’s market cap stands at £20,351.17 million, and its 1-year return is at

41.05 per cent as of 25 October 21.


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