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London Stock Exchange boosts FTSE on new bid hopes
US group Intercontinental Exchange considers bid, potentially scuppering Deutsche Boerse approach for LSE.
London Stock Exchange (LSE) has led the FTSE 100 higher after US group Intercontinental Exchange said it was considering making a counter bid for the group, following Deutsche Boerse's approach.
Shares in LSE jumped 7.5% to £28.78, helping the FTSE 100 rise 37 points, or 0.6%, to 6,134.
Intercontinental Exchange (ICE.N) said that it had not yet approached the LSE's board or decided on a bid. Should it make an approach, it could derail talks between LSE and German rival Deutsche Boerse (BG1Gn.DE) over a merger.
'Those buying into LSE are hoping that a bigger US appetite for LSE's operations will be rewarded with an even higher offer than the £20 billion merger of equals with Deutsche Bank which is currently on the table and which would result in the biggest exchange in Europe; a genuine rival to US markets,' said Mike van Dulken, head of research at Accendo Markets.
The FTSE 100 was able to shoulder big drops in the shares of Barclays (BARC), down 10.7% at 153.7p as the bank announced dividends would be lashed this year and the next, and equipment rental company Ashtead (AHT), 14.4% lower at 791p on fears of a US slowdown.
Ashtead, which generates the bulk of its profits in the US, said it would cut capital expenditure next year. 'The market is clearly worried about a potential US slowdown,' said Charles Huggins, investment analyst at Hargreaves Lansdown.
'Ashtead's plans to cut back capital expenditure and reduce leverage are sensible in this context, but do little to allay investors' concerns of tougher times ahead.'
Joining LSE towards the top of the FTSE 100 was insurance group Direct Line (DLGD), up 4.8% at 407.1p after reporting profits ahead of forecasts.
Miners also rose as Chinese data showing a slowdown of factory activity boosted hopes of further stimulus measures. Anglo American (AAL) rose 5.7% to 507.4p, BHP Billiton (BLT) was up 3.1% at 750.4p and Rio Tinto (RIO) rose 2.6% to £19.52.
The news also helped lift shares of BlackRock World Mining (BRWM ) 3.4% higher to 207.7p, as the investment trust announced a 14p final dividend, taking 2015's payment to 21p, in line with last year's, but warned future payouts would be lower.
On the FTSE 250, shares in Rotork (ROR) surged 13.8% to 181.6p amid investor relief that the valve manufacturer was able to post results in line with guidance, following a profit warning last year.
Greggs (GRG) was also a strong riser, up 13.2% at £11.71, after announcing plans to close three bakeries and cut up to 355 jobs in a bid to save £100 million.
On the FTSE Small Cap index, it was a good day for the managers of the Strategic Equity Capital (SEC ), with two of the small companies investment trust's 17 holdings topping the index.
Tribal Group (TRBG) jumped 26.6% to 50p as the education support services company sold its Synergy children's services IT system for £20.3 million to another of the trust's holdings, Servelec (SERV). Shares in Servelec rose 8.5% to 345p.
Shares in Tribal have been hammered over the last six months, as the company delivered a brace of profit warnings as sales win rates dropped and a large Australian project was delayed. In November last year, Tribal appointed a new chairman and independent director, both of whom hold the same position at Servelec.
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- London Stock Exchange Group PLC (LSE.L)
- Barclays PLC (BARC.L)
- Ashtead Group PLC (AHT.L)
- Direct Line Insurance Group PLC (DLGD.L)
- Anglo American PLC (AAL.L)
- BHP Billiton PLC (BLT.L)
- Rio Tinto PLC (RIO.L)
- Rotork PLC (ROR.L)
- Greggs PLC (GRG.L)
- Tribal Group PLC (TRBG.L)
- Servelec Group PLC (SERV.L)
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by Daniel Grote on Jul 28, 2016 at 10:04