The FTSE 100 has been thrown into upheaval by the war in Ukraine. But what are the best FTSE 100 shares to watch in April?
Analysts at online trading provider IG have picked five to keep an eye on, and their first pick has been directly affected by Ukraine.
FTSE 100 defence stock
It’s BAE Systems, whose shares are up 24% since the war started. They were previously gaining, and this latest boost pushes the BAE share price up 43% over the past 12 months.
An upbeat set of full-year results released on 24 February added some buoyancy. Revenue, earnings, and cash flow all grew during 2021. Debt dipped a little. And the dividend was lifted 6% for a 3.4% yield on today’s share price.
What about rumours that BAE might make an offer for fellow FTSE 100 engineer Rolls-Royce? IG reckons that, due to security issues, “BAE is one of the only companies that could successfully pursue the engineer“.
Soaring investment trust
Scottish Mortgage Investment Trust has been popular with investors for some time. But after climbing to record highs in late 2021, the share price has gone off the boil. Over 12 months, it’s down 11%. So what’s been happening?
Scottish Mortgage is heavy in US tech stocks. And IG points out that the combination of rising inflation and interest rates, and the Omicron Covid variant, haven’t helped. Geopolitical pressures surrounding Chinese companies listed in the US make it more vulnerable, according to IG.
Is it a top FTSE 100 buy now? IG reckons it “could represent a rare buying opportunity“.
FTSE 100 energy
Focus on energy shares has intensified under the pressure of the Ukraine war. The desire to abandon Russian oil and gas supplies has added extra impetus in a world moving away from hydrocarbons and to renewable energy.
IG’s analysts reckon that might make SSE a desirable FTSE 100 pick right now. SSE is big in offshore wind farm development. And that should get a boost from government plans to quadruple capacity by 2030.
The SSE share price, meanwhile, is up 19% over the past 12 months.
Russian commodities
Glencore has come under pressure over Russia. As IG puts it, “While BP and Shell have declared they will exit their Russian positions, Glencore has said it has ‘no realistic way’ to leave the country“.
Glencore owns 10.5% of Russia’s EN+, together with a small stake in Rosneft. And looks like we’re set to see the sanctions screws turned tighter.
On the plus side, the Glencore share price is up 77% over 12 months, while the FTSE 100 has managed just 12%.
Telecoms resurgence
IG’s fifth FTSE 100 share to watch in April is Vodafone. The share price spiked in February this year, but it quickly went off the boil again. Shares in the mobile communications giant are now down 7.5% over 12 months, falling more than 35% over five years.
IG points at conflicting pressures on the Vodafone share price. On the one hand, it says, “the FTSE 100 stock has seen profits before tax increase from €2.7bn to €4.4bn over the past five years“.
But against that, at the halfway stage, adjusted net debt had climbed to €44.3bn. That’s with interest rates rising.