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Market Wrap - Market Open

FTSE rising as Shell-BG merger gets China's okay

14 December 2015 08:59

FTSE indices were moderately up following Friday's falls, with hitherto-under-pressure Old Mutual (OML) staging double-digit rebound. Overall gains were supported by supermarkets, house builders and financials. The Shell (RDSA) and BG (BG.) tie-up won China regulatory approval.

Shortly after the open, FTSE 100 was up 45.58 points, or 0.77%, to 5998.36. FTSE 250 gained 71.13, or 0.42%, to 16,948.4, still below the psychological 17,000 level. At 8.43am, crude was mildly lower and gold was at USD1069/oz. Europe was up despite Asia being lower this morning.

Royal Dutch Shell (RDSA), down 0.31% to 1449p, said its recommended combination with BG Group (BG.), up 2.2% to 946.15p, has received unconditional merger clearance from the Chinese Ministry of Commerce. This was the final regulatory clearance required.

Old Mutual (OML) enjoyed a 10.05% rise to 171.35p, having tumbled after South Africa ditched its finance minister last week causing weakness in the rand. Thereafter, supermarkets were rising behind Tesco (TSCO), up 2.45% to 147.88p, and Sainsbury (SBRY), up 2.3% to 240.4p.

House builders firmed after Barratt Developments (BDEV), up 2.15% to 605.25p, despite Rightmove predicted the London housing market will run out of steam in 2016. Several banks followed HSBC (HSBA), up 1.62% to 506.05p. Also rising were airlines and several utilities.

Overall, fallers numbered just 19. These rich with miners after Randgold (RRS), lower 2.16% to 4039p, and pharmas after Shire (SHP), down 1.61% to 4230p. Meantime, Diageo (DGE) rose 1.05% to 1825.5p on appointing its 54.3%-held Guinness Nigeria as the exclusive distributor of the group's international premium spirits brands with effect from Jan. 1.

BIGGER MOVERS

Tribal Group (TRB), down 54.48% to 24.75p, has warned its FY adjusted operating profit is likely to be significantly lower than anticipated, citing slow sales momentum and a number o key customer contract milestones being moved into 2016.

Audioboom (BOOM), down 24.24% to 3.13p, has warned FY revenues will be below market views but its overall operating performance, measured at the EBITDA level, and financial position were broadly in line with forecasts.

CityFibre (CFHL), down 18.8% to 54p, has agreed the conditional acquisition of certain national infrastructure assets of KCOM (KCOM) for GBP90m, together with an underwritten placing to raise GBP80m at 50p a share. KCOM rose 2.08% to 104.63p.

ECONOMIC NEWS

Rightmove said it expects the London housing market will run out of steam in 2016. It nevertheless expects the capital's housing stock will enjoy rises in asking prices of 3% over the next 12 months.

LONDON HIGHLIGHTS

Circle Oil (COP), down 16.67% to 3.12p, is mulling options including a debt restructuring and/or an equity raise to right-size the balance sheet and ensure it has enough cash flows to fund operations. Serica Energy (SQZ) rose 11.4% to 8.5p after providing the market with an operations update that confirmed its strong performance through November and early December.

Iofina (IOF), up 9.3% to 10.11p, noted the recent decline in its share price and noted like-for-like output was up 75% year. This was despite downtime due to its partners' work on the salt water disposal, coupled with recent weather-related power outages.

Trakm8 (TRAK), up 2.77% to 352.5p, and the AA (AA.), up 0.77% to 269.55, have extended their relationship. Trakm8 has supplied telematic systems to the AA for their roadside assistance and recovery vehicles for over four years.

Benchmark (BMK), down 2.15% to 91p, has agreed to acquire INVE Aquaculture Holding BV, a specialist manufacturer of primary stage technically advanced nutrition and health products for aquaculture, for a total consideration of USD342m.

Man Group (EMG), up 1.66% to 155.95p, noted press chatter about the potential appointment of Lord Livingston of Parkhead as its chairman. It noted the potential appointment was subject to FCA review and that an announcement would be made when the process was complete.

RPC Group (RPC), up 1.57% to 776p, announces the proposed acquisition of GCS Group, a global manufacturer and provider of closures and dispensing systems, for an enterprise value of 650m euros on a cash- and debt-free basis.

Savannah Resources (SAV), up 1.67% to 1.53p, has completed the historical drilling data compilation and Exploration Target estimates for the Block 4 and 5 permits in Oman, which demonstrate potential to define a significant copper resource.

Other stocks in the news included BTG (BTG), Inland Homes (INL), Telit (TCM), Aurora Russia (AURR), WPP (WPP), Midatech Pharma (MTPH), Opera (OPRA), RedT (REDT), Entertainment One (ETO), Petrofac (PFC), PHSC (PHSC), Orogen Gold (ORE), Sunrise Resources (SRES) and Cohort (CHRT).

Story provided by StockMarketWire.com

Related Company: BG.

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