Wealth Manager - the site for professional investment managers

Register to get unlimited access to all of Citywire’s Fund Manager database. Registration is free and only takes a minute.

FTSE steadies after 14-year high as insurers weigh

FTSE steadies after 14-year high as insurers weigh

The FTSE 100 has steadied after setting a fresh 14-year high, dragged down by Old Mutual and Aviva after the insurers issued results for the first three months of the year.

The FTSE 100 shed 11 points, or 0.2%, to 6,867 with Old Mutual and Aviva among the largest fallers, dropping 2.2% and 1.6% to 204.8p and 522.8p respectively. Earlier the UK blue-chip index had reached 6,895, the highest level since December 1999. It marks the second time the index has notched up a 14-year high this week.

Traders took profits on Old Mutual (OML) after the insurer posted a 24% rise in sales for the first quarter of the year. Shares in Old Mutual hit near a 12- month high last week.

Old Mutual chief executive Jim Roberts said on a conference call that the group expected its UK business to benefit from Budget changes to pensions that will remove the need for many to buy an annuity and relax rules around pension drawdown.

‘We expect to be a net beneficiary from the radical changes to the UK pensions system,’ he said. ‘We have no exposure to annuities but are a leading provider of pension income drawdown.’

It was a different story for Aviva (AV), where a drop in annuity sales led to a 22% decline in UK new business over the quarter, while harsh weather in Canada led to a rash of claims for its general insurance business, offsetting positive results elsewhere.

‘Aviva has reported a solid first quarter trading statement showing the benefit of a diversified portfolio in the face of weather losses and regulatory change,’ said Barrie Cornes, analyst at Panmure Gordon. ‘There remains much to do but Aviva is in a strong position and getting better.'

Land Securities (LAND) was another faller, shedding 29p, or 2.6p to £10.76 as full-year 2014 results for the real estate investment trust prompted a mixed response from investors. A 12.2% jump in net asset value was ahead of consensus expectations, but some analysts saw the results as disappointing.

The London Stock Exchange (LSE) was amongst the big risers, jumping 46p, or 2.6%, to 859p after reporting a 42% increase in pre-tax profits.

FTSE 250 stock Carphone Warehouse (CPW) meanwhile fell 2.9% to 318.8p after agreeing a £3.8 billion merger with electronics retailer Dixons (DXNS).

Meanwhile, hopes that the economic recovery in Europe had gained momentum were dealt a blow after new figures showed growth in the eurozone stood at just 0.2% in the first three months of the year. The euro fell 0.4% to $1.3658 on the news.

Leave a comment!

Please sign in or register to comment. It is free to register and only takes a minute or two.
Citywire TV
Play Navigating geopolitical risk with ETFs

Navigating geopolitical risk with ETFs

ETFGI’s Deborah Fuhr on how investors can use exchange-traded funds to position their portfolio.

Play Sarasin’s Boucher: why I like salmon with chocolate

Sarasin’s Boucher: why I like salmon with chocolate

Henry Boucher, manager of the £129 million Sarasin Food & Agriculture Opportunities fund, explains why he is gobbling up salmon and chocolate stocks.

Play Alibaba hype, the UK slowdown and opportunities in European sovereign bonds

Alibaba hype, the UK slowdown and opportunities in European sovereign bonds

Libby Ashby and leading wealth managers analyse what the Alibaba IPO hype means for Chinese equities, slowing growth of the UK economy and whether there’s anything left to play for in the European sovereign bond market.

Your Business: Cover Star Club

Profile: How David Esfandi is shaping Canaccord Genuity WM

Profile: How David Esfandi is shaping Canaccord Genuity WM

After six months as chief executive of Canaccord Genuity David Esfandi's ambitions are taking shape

Wealth Manager on Twitter