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RBS tops FTSE on Abu Dhabi stake sale talks

Royal Bank of Scotland shares rise on news that the government is in talks with Abu Dhabi to sell up to a third of its stake in the bank.

 
RBS tops FTSE on Abu Dhabi stake sale talks

Shares in Royal Bank of Scotland (RBS.L) added 1.35p, or 4.9%, to 29.1p amid news that the UK government is in advanced talks with Abu Dhabi to sell part of its 82% stake in the bank.

The deal could see the Gulf state buy up to a third of the government's shares in what would be a loss-making sale, as £45.5 billion of tax payers’ money was poured into the bank at the height of the financial crisis, valuing each share at an average of 50p.

Other banking stocks also made gains in Tuesday morning trade. Lloyds (LLOY.L) added 0.7p, or 2.1%, to 36.3p and Barclays (BARC.L) rose 6.7p, or 2.7% to 254p.  

Britain’s market indices opened tracking gains made overnight in Asia. The FTSE 100 took on 0.54%, or 32 points, to 5,935 and the Mid-250 index gained 0.44%, or 46 points, to 11,786. See the FTSE’s performance and the index’s top risers and fallers.

Overnight markets in Asia closed higher following hints from Ben Bernanke, chairman of the US Federal Reserve, that more quantitative easing to drive growth could be on the cards.

Japan’s Nikkei 225 rose 237 points, or 2.4%, to 10,255 points; Hong Kong’s Hang Seng index added 331 points, or 1.6%, to 21,002 points; and China’s Shanghai Composite made small losses of 2.8 points, or 0.12%, to 2,348 points.

Shavaz Dhalla, financial trader at Spread Ex, commented: ‘It’s a confident, yet cautious, open to European markets this morning as the euphoria which drove global markets yesterday following a hint of further QE from US fed chairman Bernanke showed signs of extinguishing. 

‘Clearly, fears over the eurozone stability remain as an elephant in the room. This anxiety could potentially materialise further if Spanish bond auctions due later this morning fail to deliver.’

Other stock markets in Europe also made gains: Germany’s DAX index increased 0.87% to 7,141, France's CAC 40 index added 0.83% to 3,531, and the FTSEurofirst 300 index of top European shares rose 0.7% to 1,096.

Later in the day US consumer confidence figures and regional manufacturing indices could move the country’s market.

Kazakhmys ups dividend

Miner Kazakhmys (KAZ.L) ticked up 21.5p, or 2.3%, to 946p as its earnings before tax rose to £1.8 billion in 2011 on higher metal prices. It increased its dividend by 27% in 2011 to 17.5p.  

Rio Tinto (RIO.L) added 40p, or 1.2%, to £34.04 as analysts at Nomura stated ‘Rio continues to be our preferred diversified miner’ and kept a target price on the stock of £50.00. The miner is mulling selling its £750 million diamond-mining arm to focus on its metal operations.

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