LONDON (SHARECAST) - The Footsie finished the day on a high point, helped by the firm showing on Wall Street, and signs that the LIBOR (London InterBank Offered Rate) is on a downward trend.
Reports that the private-equity giant CVC has teamed up with Swiss Re, the world’s largest reinsurance group, to make a bid for the insurance arm of Royal Bank of Scotland (RBS) boosted the cash-strapped Scottish bank. The reported bid would value the RBS division, which includes the household names Direct Line and Churchill, at more than £6bn.
Prudential was the top performer for most of the day before being usurped by RBS at the death. The insurer gives an update on new business tomorrow and is expected to announce that a sovereign wealth fund is to take a 20% stake in the company; the money thus raised will bankroll a bid for the Asian assets of AIG, its cash-strapped American rival.
Enterprise search software specialist Autonomy surged on the release of an information governance solution for Microsoft Office SharePoint Server (MOSS).
Outside of these three big gainers, miners and oils accounted for most of the big rises, as commodity prices rebounded. Higher metal prices boosted miners including Vedanta, International Ferro Metals and Rio Tinto, while hopes of a reduction in output by OPEC, the Organisation of Petroleum Exporting Countries, helped oil producers Royal Dutch Shell, BG Group and BP.
Cable and Wireless was weaker on reports that it has postponed plans for a demerger until next year because of the turmoil in financial markets. The telecoms provider had been expected to announce it would split its UK arm from international operations on November 10, when it unveils half-year results.
Standard Chartered moved higher despite UBS slashing its price target for the bank from 1750p to 1100p on expectations of slower growth. UBS projects weakening demand in Taiwan and Hong Kong for the bank’s wealth management services. US broker Merrill Lynch has also cut its price target for Standard Chartered, from 1980p to 1153p.
William Hill jumped after the bookmaker announced an internet partnership with Playtech and said it saw total gross win rise by 9% in the 15 weeks ended 14 October. Ladbrokes rose in sympathy.
Lloyds insurer Amlin’s estimated claims from Hurricanes Gustav and Ike are $285m, net of reinsurance and reinstatement premiums, cutting forecasts for profit after tax in 2008 by about £45m.
Sports Direct, the discount sports retailer owned by current Newcastle United chairman Mike Ashley, has admitted paying £3.4m for 11.9m shares in distressed rival JJB Sports at 28.5p each on Friday. The firm also said it holds long-only contracts for difference (CFD) in respect of 42.9m JJB shares at an average price of 29.05p and has a maximum exposure under these CFDs is £12.46m.
Financial trading software specialist Fidessa is cautious over prospects for 2009 despite good progress across all regions with business in line with management's expectations this year.
Shopfitter Styles & Wood has warned lower margins will mean the group only breaking even this year. Revenue for the year ending 31 December 2008 is anticipated to be in line with expectations.
Engineer Senior remains confident about the future despite a looming recession as adjusted profit before tax, and free cash flow came in “slightly” ahead of expectations during the third quarter.
Radio group UBC Media expects turnover to be 15% lower than the same time a year before as advertising revenues continue to fall.
Car dealer Inchcape is still rolling downhill after Friday’s profit warning. Citigroup responded to Friday’s gloomy statement by cutting its price target by almost two-thirds, from 300p to 110p, though it keeps it buy recommendation on the stock.
Asset based lender Davenham announced at 4.30pm last Friday that it does not expect to be profitable in the current financial year. It is cutting its workforce by 20% and recommends the withdrawal of its final dividend. In the “interests of clarity”, the company re-published the announcement this morning, prompting a loss of around three-quarters of the market capitalisation of the company.
Aga Rangemaster has gone off the boil after the cooker and kitchen appliances maker said operating profit in the second half will be lower than the first half due to the poor trading conditions.
Sub-prime lender Cattles was the top performer among FTSE 250 stocks, clawing back some of the heavy losses sustained last week when the share price halved.
Fund and wealth management specialist Rathbone Brothers slumped after RBS downgraded the stock from “buy” to “hold” on fears that the rapidly deteriorating market conditions will bite into its profit margins.
FTSE 100 - Risers
Royal Bank of Scotland Group (RBS) 84.50p +23.18%
Prudential (PRU) 320.25p +18.61%
Autonomy Corporation (AU.) 1,015.00p +15.87%
Rio Tinto (RIO) 2,545.00p +13.11%
John Wood Group (WG.) 226.75p +11.29%
Man Group (EMG) 352.75p +11.01%
Royal Dutch Shell 'B' (RDSB) 1,494.00p +10.67%
Royal Dutch Shell 'A' (RDSA) 1,550.00p +10.56%
BP (BP.) 476.75p +10.42%
Vedanta Resources (VED) 688.50p +10.34%
FTSE 100 - Fallers
HBOS (HBOS) 75.20p -6.00%
RSA Insurance Group (RSA) 116.30p -3.08%
Hammerson (HMSO) 705.50p -2.82%
Liberty International (LII) 744.00p -2.55%
Admiral Group (ADM) 890.00p -2.41%
Cable & Wireless (CW.) 138.80p -2.32%
Stagecoach Group (SGC) 218.75p -1.91%
Shire Plc (SHP) 778.50p -1.33%
3i Group (III) 450.50p -1.21%
Fresnillo (FRES) 154.90p -0.83%
FTSE 250 - Risers
Cattles (CTT) 36.25p +54.26%
Ashtead Group (AHT) 50.50p +15.43%
International Ferro Metals (IFL) 30.00p +14.29%
William Hill (WMH) 189.50p +13.81%
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