Date: Thursday 31 May 2012
- IHG jumps on M and A speculation
- Logica soars after CGI bid
- Stocks rise but eyes still focus on Eurozone
Stocks had held on to early gains by Thursday lunchtime as the Footsie attempted to rebound from heavy falls the day before; concerns over Spain and its financial system sent stocks tumbling yesterday, with the FTSE 100 finishing down 1.7 per cent.
Ireland is holding a referendum on the fiscal treaty; opinion polls over the weekend suggest that 60% of voters will vote in favour of the treaty. Also helping sentiment this morning was upbeat economic data from Germany. German retail sales rose for a second straight month in April, while the unemployment rate dipped lower from 6.8% to 6.7% in May.
Turning to Spain, the European Commission (EC) said yesterday that it may give the country an extra year to cut its deficit to 3%, easing the pressure on Prime Minister Mariano Rajoy. The EC has also said that the country needs to provide Europe with details on its plans for its fourth largest lender Bankia.
The possibility of implementing jointly issued Eurozone debt remains a possibility, according to Eurogroup President Jean-Claude Juncker. “The solution of eurobonds to relaunch growth in Europe is still on the table,” said Juncker in a news conference.
Holiday Inn and Crowne Plaza owner InterContinental Hotels Group (IHG) was in demand on the back of M&A speculation, with analyst at Numis earlier this week speculating about a possible tie-up with sector peer Marriott. More fuel was added to the rumours today after activist investor Nelson Peltz declared a 4.27% stake in IHG held through Trian Fund Management; Peltz is known to build interests in companies to push through change (he is said to have been instrumental in the Cadbury-Schweppes demerger).
Oil stocks were tracking crude prices higher this morning with Tullow Oil, BG Group and Royal Dutch Shell on the rise.
Defence giant BAE Systems edged higher on reports that it is to cut more than 600 jobs after saying that there is "no prospect of new UK armoured vehicle manufacturing" beyond 2013; it plans to close its factory in Newcastle-upon-Tyne at the end of next year.
Insurance group Admiral was a heavy faller after the Office of Fair Trading said it would refer the private motor insurance market to the Competition Commission, "after it found evidence that insurers compete in a dysfunctional way that may push up premiums for drivers by £225m a year."
Financial services giant Prudential rose after announcing that it is to get its hands on Reassure American Life Insurance Company (REALIC) through the acquisition of its US holding company from Swiss Re for £398m in cash.
Sweeteners firm Tate and Lyle was flat after it reported full-year profit numbers in line with expectations as it saw steady top-line growth across a number of its markets.
Business consultancy Logica rocketed 64% early on after news of an agreed bid from Canada's CGI Group. Information technology and business process services provider CGI is offering 105p cash per Logica share, valuing the company at around £1.7bn.
Heading the other way was car and bike parts retailer Halfords after it reported a 20% drop in full-year pre-tax profit, warning that retail sales in the 2013 fiscal year have so far been very disappointing.
FTSE 100 - Risers
InterContinental Hotels Group (IHG) 1,495.00p +3.96%
Sage Group (SGE) 256.20p +2.23%
Man Group (EMG) 73.25p +2.16%
Tullow Oil (TLW) 1,455.00p +1.96%
Hargreaves Lansdown (HL.) 480.00p +1.72%
Tesco (TSCO) 302.15p +1.72%
SABMiller (SAB) 2,395.50p +1.68%
BG Group (BG.) 1,244.50p +1.67%
Fresnillo (FRES) 1,328.00p +1.61%
Petrofac Ltd. (PFC) 1,565.00p +1.49%
FTSE 100 - Fallers
ITV (ITV) 73.50p -4.92%
Admiral Group (ADM) 1,087.00p -2.86%
IMI (IMI) 869.00p -2.08%
CRH (CRH) 1,099.00p -1.96%
Shire Plc (SHP) 1,829.00p -1.72%
Aberdeen Asset Management (ADN) 233.50p -1.68%
Croda International (CRDA) 2,122.00p -1.44%
Smiths Group (SMIN) 1,003.00p -1.18%
Pearson (PSON) 1,135.00p -0.96%
British Sky Broadcasting Group (BSY) 688.50p -0.94%
FTSE 250 - Risers
Logica (LOG) 108.10p +64.54%
RPC Group (RPC) 393.90p +5.63%
Hansteen Holdings (HSTN) 75.90p +5.56%
Northgate (NTG) 176.90p +5.30%
Ruspetro (RPO) 157.30p +3.83%
Berkeley Group Holdings (The) (BKG) 1,246.00p +3.66%
Bumi (BUMI) 351.20p +3.60%
Centamin (DI) (CEY) 66.55p +3.58%
Perform Group (PER) 365.20p +3.57%
Regus (RGU) 90.45p +3.43%
FTSE 250 - Fallers
Halfords Group (HFD) 250.00p -9.39%
JD Sports Fashion (JD.) 675.00p -3.85%
Home Retail Group (HOME) 74.25p -3.07%
Bodycote (BOY) 384.10p -2.07%
WH Smith (SMWH) 489.90p -1.67%
Daily Mail and General Trust (DMGT) 381.50p -1.65%
Aquarius Platinum Ltd. (AQP) 75.70p -1.62%
Spirit Pub Company (SPRT) 49.50p -1.49%
Britvic (BVIC) 331.40p -1.46%
Talvivaara Mining Company (TALV) 136.90p -1.23%
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