The Week Ahead: Who's in and who's out of the Footsie's first division?

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The Independent Online

Fresh from their summer breaks, traders plunge straight back into the fray this week, with a busy reporting schedule, the Bank of England's decision on interest rates, and a shake-up of the FTSE 100.

Stocks likely to be promoted to the top flight when their market capitalisations are calculated on Tuesday evening include life insurance and asset management group Resolution and its recently listed colleague Standard Life, which hit a record high of 269p last Friday.

One financial services stock definitely getting promoted is Bradford & Bingley, which lost its place in September 2004 but will now take the spot vacated by BOC, the gas group acquired by Linde of Germany in a recent £8.3bn deal.

Companies that look set for demotion next week include telecoms group Cable & Wireless, fund manager Schroders and rat catcher Rentokil Initial.

Inclusion in the top flight is prized because "tracker" investment funds are compelled to acquire shares in the companies that make up the index.

They may be watching from a FTSE 250 barstool but JD Wetherspoon investors won't feel left out. Shares in the pub chain have climbed 60 per cent in the past 12 months, touching a six-year high of 454.75p on 31 July. Lehman Brothers is expecting analysts to raise their glasses after Wetherspoon's full-year result on Friday: it predicts pre-tax profits of £57m against last year's £47m.

Elsewhere in the pub trade, analysts are keen for proper evidence of the impact of Scotland's smoking ban. Pub operator Greene King has reported a 2.4 per cent drop in drink sales over May, June and July, and this week investors will hear from Punch Taverns, which is due to release a trading update on Wednesday.

From pubs to bets. Online gambling group PartyGaming should enjoy a strong hand despite regulatory issues in the US. Dresdner Kleinwort analyst Andrew Lee said it was unlikely that legislation aimed at banning the use of credit cards to pay for bets on the web would pass through the US Congress, because there is "neither sufficient time nor political support".

Mr Lee added that Party- Gaming reported strong second- quarter revenue of $319.3m, so there will be few surprises in the numbers. Instead, most investors will want to hear more about the company's margins. Mr Lee believes that, before costs, they could be as high as 56.8 per cent.

Overseas, the Dutch brewer Heineken reports its interim results on Wednesday. But its former chief executive, Marc Bolland, will be of more interest to British investors, when he takes the reins as chief executive of Wm Morrison tomorrow.

His appointment marks a new chapter for the supermarket group, whose fortunes have plummeted since the acquisition of Safeway in 2004 led to a string of profit warnings and a collapse in the share price. Mr Bolland's appointment should sideline Sir Ken Morrison, the headstrong son of the founder, from day-to-day management.

Hoping to light up the market on Wednesday is tobacco group Gallaher, which reports first-half results. Stockbroker Charles Stanley has maintained its "buy rating" on the stock and said Gallaher could be in the sights of bigger players such as Japan Tobacco or British American Tobacco as the sector consolidates.

And the airlines will stay in the headlines with British Airways due to report its most recent traffic statistics on Tuesday and easyJet delivering on Thursday.

In economic news, interest rate jitters are likely to resurface with the Bank of England deciding whether to raise the cost of borrowing again on Thursday.

David Page, at Investec Securities, said he expected rates to remain on hold at 4.75 per cent but predicted they would rise to 5 per cent in November.

The US market will be closed tomorrow for the Labor Day holiday, but will be closely watched later in the week when the Federal Reserve's Beige Book is released. The data gives a pointer to the outlook for American growth.

And while there was a blip for the black stuff last week as US inventories rose and the cost of oil slipped under $70 a barrel, prices are already up again. So the UK's Cairn Energy and John Wood should highlight the sector's continuing strengths when they report first half-results.


Tomorrow 4

UK RESULTS: (final) Murgitroyd, Pace Micro Technology; (interim) Amlin, Bond International, Charlemagne Capital, Corporate Synergy, Goldenport, Hammerson, IMI, Interteck, Lookers, Robert Walters, SDL, Tarsus Group, Taylor Nelson Sofres, WSP Group, ZI Medical

Tuesday 5

UK RESULTS: (F) Abcam; (I) Advanced Medical, Aegis, Brammer, Brit Insurance, Brixton, Cairn Energy, Cello, Dechra Pharmaceuticals, Dmatek, Gresham Computing, Hays, Headlam, Independent News & Media, Inion OY, John Wood, Lavendon, Mattioli Woods, Megitt, Savills, Spectris, Tikit; (first quarter) Ashtead

Wednesday 6

UK RESULTS: (F) Town Centre Securities; (I) Associated British Ports, Chesnara, Derwent Valley, Devro, Financial Objects, Gallaher, Imagesound, IXEurope, Mucklow (A& J), Shore Capital, Ubiquity Software, Wilson Bowden

Thursday 7

UK RESULTS: (F) Galliford Try, Hargreaves Services; (I) Abbot, Arriva, Benfield, Erinaceous, KBC Advanced Technologies, Melrose Resources, MTL Instruments, PartyGaming, Pipex Communications, SHL, Spirax-Sarco Engineering, Surgical Innovations, Yule Catto & Co; (Q2) Premier Farnell

Friday 8

UK RESULTS: (F) Go-Ahead, JD Wetherspoon, NetStore; (I) Advanced Fluid Connections, Aga Foodservice, Catlin, Davis Service, Marshalls, Titan Europe