Wealth Manager - the site for professional investment managers

Register to get unlimited access to Citywire’s fund manager database. Registration is free and only takes a minute.

Prudential rises on flat FTSE as City eyes ‘special dividend’

Prudential rises on flat FTSE as City eyes ‘special dividend’

Insurance company Prudential (PRU.L) was one of the biggest risers on a flat FTSE 100 after the insurer announced targets that analysts said could mean bigger payouts for investors.

Among muted market moves, with the FTSE 100 little changed at 6,558 despite more gains overnight on Wall Street, Pru edged up 1.3% to £12.83.

Ahead of its investor day, the company announced plans to generate free surplus of at least £10 billion by the end of 2017. ‘We interpret this to mean significant returns of surplus capital for shareholders,’ commented Panmure Gordon analyst Barrie Cornes.

‘In our view there is a strong possibility that there might not only be the usual significant hikes in the dividend every other year but also the very real possibility of special dividends,’ he added.

Fahad Changazi, an analyst at Nomura, said the Pru's plan, which also included a target of generating 15% annual pre-tax profits growth in its Asian business, ‘reaffirms the good growth outlook for the group, which we believe still makes Prudential stand out amongst its larger UK listed peers’.

Of other London risers, Smiths Group (SMIN.L) rose 2.4% to £14.11 after analysts at Morgan Stanley raised the stock to an ‘overweight’ rating.

At the other end of the index, Whitbread (WTB.L), the owner of Premier Inn and Costa Coffee, fell 1.3% to £34.81 despite posting a 4.3% rise in third quarter sales and telling investors its full year results were on track to meet expectations.

Several analysts raised their target prices for Whitbread, among them Numis’s Wyn Ellis who said ‘the update is sufficiently positive to help maintain momentum for the shares’.

The weak performance on the FTSE 100 came despite the US S&P 500 closing at another record high. Investors seemed unmoved by more relatively upbeat data on China’s economy, with retail sales growth in November and a slight slowdown in industrial output.

That comes after reports earlier this week showed that China’s exports growth rebounded to a seven-month high of 12.7% year on year in November, up from 5.6% in October. Imports though grew by just 5.4%, a five month low. Consumer price inflation meanwhile slowed more than expected from 3.2% in October to 3% in November.

‘With a muted inflation and a pace of GDP growth in line with China’s potential, we expect the government to maintain neutral monetary and fiscal policies in the next couple of quarters while increasing their efforts on drafting and carrying out structural reforms,’ commented Ting Lu, an economist at Bank of America Merrill Lynch

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 Dispelling the sustainable investing myths

Dispelling the sustainable investing myths

There's a bit of a buzz around sustainable investing at the moment. We speak to three wealth managers to find out what they think.

Play Inside ETFs: positioning for the Fed rate rise

Inside ETFs: positioning for the Fed rate rise

Natalie Fast discusses how investors are using ETFs to position for a rate rise with guests Irene Bauer from Twenty20  Investments and Markit's Simon Colvin.

Play Wealth Manager Retreat: video highlights

Wealth Manager Retreat: video highlights

The UK's leading wealth management talent gathered at our annual event at the Grove celebrate the best in private client portfolio management.

Your Business: Cover Star Club

Profile: why Jamie MacLeod turned to private clients

Profile: why Jamie MacLeod turned to private clients

Many considered it a left hand turn when MacLeod left product origination in 2010 to become the head of a smallish distributor

Wealth Manager on Twitter