Date: Wednesday 13 Jun 2012
With Spanish government bond yields rising to all-time highs in the Eurozone era, Footsie is back to square one after a confident start.
There are no major UK economic indicators today to provide direction and not a lot of corporate news flow either, adding to the general air of ennui.
Supermarket group Sainsbury's keenly awaited trading update proved a bit anti-climactic with like-for-like (LFL) sales growth below expectations. LFL sales in the 12 weeks to June 9th were up 1.4% on the corresponding period of last year, below market expectations of growth of between 1.6% and 2.0%. Total sales for what is the first quarter of the supermarket chain's first quarter were up 3.6% year-on-year, or 3.8% excluding fuel.
Competition in the supermarket sector remains as fierce as ever, with Tesco boss Philip Clarke recently describing as "unhelpful" the "coupon war" being waged by some of the major players - including Tesco. Now reports are emerging that Morrisons might be joining the battle, having previously eschewed coupons. The chain disclosed on Tuesday that it is giving a voucher scheme a trial run on ten stores in the north-east of England.
Elsewhere in the retail sector, JD Sports is wanted after reporting a pick-up in LFL sales growth. The designer label sportswear retailer said LFL sales in the 19 weeks to June 9th were up 1.5% on the corresponding period of the previous year, which represents an improvement in the growth rate of 1.2% previously reported for the nine weeks to the end of March.
Scottish oil and gas giant Cairn Energy is to make an agreed takeover of North Sea oil producer Nautical Petroleum. Cairn is offering 450p per share in a deal which values Nautical at around £414m. The terms represent a 51.1% premium to the closing price of Nautical on the trading day prior to the announcement of the bid.
In other bid news, pharmaceuticals firm Proximagen has shot up after succumbing to a takeover offer from US firm Upsher-Smith Laboratories (USL). USL is offering 320p in cash per Proximagen plus either a further 192p in cash or an equivalent amount in loan notes. The terms value Proximagen at around £357m.
The bid is good news for intellectual property development firm IP Group, which has a 7.6% stake in Proximagen.
Supply chain software company Kewill has received a last-minute bid from Symphony, a US private equity firm, beating off rival bidder Francisco Partners. Symphony is offering 106p per Kewill share.
Ahead of its annual general meeting (AGM) later today in Dublin advertising and media conglomerate WPP has announced yet another acquisition. The group has bought a majority stake in Mumbai based Hungama Digital Services for an undisclosed sum.
Of more interest to the market, however, is the vote at the AGM on executive remuneration. Shareholders are angry about plans for its Chief Executive, Sir Martin Sorrell, to get a 30% pay rise to £1.3m, as well as increases in his bonus arrangements that could see him pocket an extra £6.5m a year.
If the vote at the AGM goes against the company it will mark a record sixth revolt against executive pay in one year as the so-called 'shareholder spring' continues. However, the vote will not be binding and every public utterance by Sorrell indicates he is unlikely to be shamed into forgoing any bonuses.
FTSE 100 - Risers
Shire Plc (SHP) 1,910.00p +1.76%
Resolution Ltd. (RSL) 198.70p +1.74%
SSE (SSE) 1,383.00p +1.69%
ARM Holdings (ARM) 509.50p +1.09%
ICAP (IAP) 350.00p +1.01%
Royal Bank of Scotland Group (RBS) 224.20p +0.99%
Lloyds Banking Group (LLOY) 29.41p +0.87%
Next (NXT) 3,076.00p +0.82%
AstraZeneca (AZN) 2,685.00p +0.81%
Legal & General Group (LGEN) 116.70p +0.78%
FTSE 100 - Fallers
IMI (IMI) 829.50p -4.60%
Xstrata (XTA) 932.10p -3.91%
Sainsbury (J) (SBRY) 280.10p -3.78%
Evraz (EVR) 259.30p -2.77%
Glencore International (GLEN) 356.75p -2.75%
Man Group (EMG) 72.55p -2.62%
Intertek Group (ITRK) 2,605.00p -2.36%
GKN (GKN) 181.20p -2.00%
Aggreko (AGK) 2,190.00p -1.75%
Meggitt (MGGT) 369.70p -1.73%
FTSE 250 - Risers
Bumi (BUMI) 344.00p +4.24%
Spirit Pub Company (SPRT) 47.00p +3.30%
Lamprell (LAM) 79.20p +2.86%
Jupiter Fund Management (JUP) 206.50p +2.79%
Genus (GNS) 1,267.00p +2.51%
RPC Group (RPC) 374.20p +2.41%
Howden Joinery Group (HWDN) 117.80p +2.35%
Heritage Oil (HOIL) 122.60p +2.34%
New World Resources A Shares (NWR) 301.70p +2.31%
Avocet Mining (AVM) 151.40p +2.16%
FTSE 250 - Fallers
Aquarius Platinum Ltd. (AQP) 61.40p -4.21%
Cookson Group (CKSN) 599.50p -4.16%
Talvivaara Mining Company (TALV) 138.90p -3.88%
Spectris (SXS) 1,469.00p -3.67%
Fenner (FENR) 338.40p -3.67%
Kesa Electricals (KESA) 46.85p -3.60%
Home Retail Group (HOME) 70.85p -3.54%
Imagination Technologies Group (IMG) 457.70p -3.19%
Barratt Developments (BDEV) 122.90p -3.15%
Taylor Wimpey (TW.) 43.37p -2.78%
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