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Investors swoon over Aberdeen, give FTSE cold shoulder

by Chris Marshall on Feb 14, 2013 at 09:31

Investors swoon over Aberdeen, give FTSE cold shoulder

There was little love for FTSE 100 stocks on Valentine’s Day 2013, but investors were swooning over Aberdeen Asset Management after the funds firm announced it had taken Artio Global Investors under its broad arms.

London’s blue chip index was flat at 6,358, failing to match gains on Wall Street and Asia overnight. Europe looked better though, with the eurofirst 300 up by 0.2%.

On currency markets the euro was suffering, down 0.4% to $1.3395 after weak economic growth readings for euro area countries. Germany’s 2012 Q4 GDP dropped by 0.6%, Italy declined by 0.9% and France suffered a 0.3% contraction, all worse than market expectations.

Among London shares, Aberdeen Asset Management (ADN.L) was making gains, up 2.3% to 425p after the asset manager announced it had bought US fixed income manager Artio Global Investors and taken a controlling 50.1% interest in SVG Advisers. Both the $175 million (£112 million) purchase of Artio and £17.5 million stake in SVG will be funded out of Aberdeen's cash reserves.

Rio Tinto (RIO.L) rose by 0.9% after the miner reported a $3 billion full-year loss which was nonetheless slightly better than the market was prepared for. The company also announced a 15% increase in its full-year dividend.

Nomura analyst Sam Catalano said the results should be ‘modestly pleasing’ to investors. ‘The reinforced focus on capital discipline, along with the strong cash generation we expect, should pave the way for meaningful capital returns to shareholders over the coming 12-24 months’

Engineering firm Amec (AMEC.L) was biggest faller among blue chips, down 5.4% to £10.64, despite reporting an 11% rise in full-year earnings.

Britvic (BVIC.L) fell nearly 7% to 391p as brokers reconsidered their ratings on the shares after the news yesterday that the drinks company’s planned merger with AG Barr was being referred to the Competition Commission.

Analysts said the deal could still happen, but they were cautious ahead of a final decision. Canaccord Genuity cut its target price on the shares to 380p, with a hold rating. Panmure Gordon maintained its 460p target, adding there ‘remains a substantial appetite amongst both boards to complete this merger and we are of the opinion that should the terms of the merger be renegotiated Britvic are likely to be in a stronger position'.

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