Date: Wednesday 20 Jun 2012
- Eyes on the MPC, Greece and FOMC
- Ex-div stocks dampen Footsie
- ITV gains on bid rumours
The Footsie slight lower on Wednesday morning with investors showing caution ahead of what is likely to be a busy day on the macro-economic front; all eyes will be on the Bank of England (BoE), Greek leaders and the US Federal Reserve.
The BoE is to release the minutes from the June meeting of its policy-making team, the Monetary Policy Committee, this morning. If April's verdict on whether to unleash more quantitative easing was finely balanced then May's is likely to have seen even more lively debate about whether to loosen fiscal policy some more. Barclays Capital predicts that the MPC will have once again split 7-2 in favour of holding quantitative easing at £325bn.
Pasok socialist party leader Evangelos Venizelos has said that an agreement could be reached on the formation of a coalition government in Greece by "midday today". This comes as the winning party in the elections, conservative New Democracy, holds discussions with both Pasok and the smaller moderate Democratic Left.
Meanwhile, the Federal Open Market Committee's (FOMC's) two-day meeting comes to an end today, with markets hoping that members will vote on further easing measures in light of recent mixed economic data and Eurozone concerns.
Heavyweight utilities stocks Severn Trent and United Utilities were heavy fallers going ex-dividend; from today, investors will not have the right to their latest dividend payments.
Shares of ITV were making gains in early trading on the back of rumours of a potential bid by Kohlberg Kravis Roberts (KKR) for the terrestrial broadcaster. Nevertheless, broker Nomura said that such a deal was unlikely "as many PE firms have looked at ITV before and not bid due to issues with exit multiple and pension."
Accountancy software behemoth Sage Group rose after acquiring a controlling interest in Folhamatic Group, a provider of accounting, tax and payroll and regulatory content software in Brazil. The UK company is paying £125m for a 75% stake in the company, equating to an enterprise value for 100% of the business, including estimated net debt, of £191m.
Investors celebrated Rio Tinto's plans to invest billions in two iron ore operations. The mining giant is investing $4.2bn in expanding operations in Western Australia and Guinea. The money is part of a $16bn investment programme that Rio has planned for 2012.
AstraZeneca fell after having successfully completed its acquisition of California-based biotechnology company Ardea Biosciences for $1.2bn.
Oilfield services group Petrofac dropped despite being declared as the selected bidder on the Pánuco integrated production service contract in Mexico.
Irish carrier Aer Lingus has told shareholders to do nothing and wait for advice from the board after rival Ryanair again staged to takeover bid for the airline. The latter has now made three unsolicited offers, with the latest valuing Aer Lingus at €694m. Aer Lingus was up 27% early on.
European electrical goods retailer Kesa Electricals sank after saying that Chairman David Newlands is to be succeeded by the group's Senior Independent Director, Alan Parker. The news came as the group slashed its dividend following a sharp decline in profits in a year in which it disposed of its Comet retail chain for just £2 - and even then it had to pump in £30m of cash to persuade turnaround specialist OpCapita to take it off its hands.
FTSE 100 - Risers
ITV (ITV) 75.90p +2.22%
Sage Group (SGE) 257.70p +1.66%
Aviva (AV.) 270.50p +1.46%
Lloyds Banking Group (LLOY) 31.33p +1.39%
Eurasian Natural Resources Corp. (ENRC) 440.60p +1.29%
Fresnillo (FRES) 1,569.00p +1.29%
Vedanta Resources (VED) 977.50p +1.19%
Legal & General Group (LGEN) 124.00p +1.14%
Hargreaves Lansdown (HL.) 501.50p +1.13%
Antofagasta (ANTO) 1,108.00p +1.09%
FTSE 100 - Fallers
Severn Trent (SVT) 1,634.00p -6.58%
United Utilities Group (UU.) 643.50p -3.88%
Reckitt Benckiser Group (RB.) 3,311.00p -2.53%
Petrofac Ltd. (PFC) 1,476.00p -2.38%
Experian (EXPN) 916.50p -2.29%
Unilever (ULVR) 2,039.00p -1.73%
Morrison (Wm) Supermarkets (MRW) 271.90p -1.59%
Aggreko (AGK) 2,053.00p -1.53%
CRH (CRH) 1,136.00p -1.22%
Tate & Lyle (TATE) 630.50p -1.18%
FTSE 250 - Risers
Essar Energy (ESSR) 123.20p +2.58%
KCOM Group (KCOM) 73.10p +2.52%
Bumi (BUMI) 357.00p +2.26%
Spirit Pub Company (SPRT) 49.50p +2.06%
ITE Group (ITE) 189.90p +2.04%
Petropavlovsk (POG) 495.10p +2.02%
Ruspetro (RPO) 133.50p +1.99%
Chemring Group (CHG) 298.10p +1.57%
Redrow (RDW) 116.70p +1.48%
Talvivaara Mining Company (TALV) 166.80p +1.40%
FTSE 250 - Fallers
Dairy Crest Group (DCG) 313.60p -5.00%
Mitie Group (MTO) 266.10p -3.02%
Carpetright (CPR) 707.50p -2.88%
Home Retail Group (HOME) 89.30p -2.78%
Fenner (FENR) 339.70p -2.72%
JD Sports Fashion (JD.) 625.00p -2.65%
Berendsen (BRSN) 470.20p -2.39%
3i Infrastructure (3IN) 120.70p -2.35%
Electrocomponents (ECM) 203.00p -2.31%
Shanks Group (SKS) 75.85p -2.13%
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