London’s FTSE 100 was up 0.25% at 7,090.71 points by lunchtime on Tuesday, led by gains across sectors including banking, tobacco and beverages.
A 0.3% decline in sterling against the US dollar to $1.3839 benefited some FTSE stocks with large US dollar earnings including CRH (CRH) and Ferguson (FERG).
Housebuilders were lifted by the latest Nationwide house price index, which surged 13.4% in June compared with last year, the biggest increase in more than 16 years, ahead of the tapering of stamp duty land tax. The average house now costs £245,432 or almost £30,000 more than it did a year ago.
COMPANY NEWS
Shares in Barratt Developments (BDEV), Persimmon (PSN), Taylor Wimpey (TW.) and Redrow (RDW) were all in positive territory by noon.
Meanwhile, house builder Countryside Properties (CSP) announced that chief financial officer Mike Scott had resigned in order to take up the same role at larger rival Barratt Developments, sending its shares 0.1% lower to 482p.
Office rental firm IWG (IWG) edged 0.6% higher to 302p on reports it was in talks last month with US private equity firm CC Capital over a bid valuing the firm at more than £4 billion compared with a current market value of £3 billion.
However, CC Capital subsequently announced that it had no plans to made an offer.
Healthcare services group UDG Healthcare (UDG) announced it had received an increased bid from private equity suitor Clayton, Dubilier & Rice, which it would recommend to shareholders.
CD&R agreed to increase its offer from £10.23 to £10.80 per share, a 5.6% increase, taking the premium to 28% over the closing price of UDG on 11 May, the day before it made its offer, and a premium of more than 12% to UDG’s all-time closing high. Shares ticked up 0.5% to £10.71.
Asset manager Standard Life Aberdeen (SLA) revealed it had sold a 5% stake in the life insurance unit of Indian bank HDFC for the equivalent of £652 million net of taxes and costs. The firm still holds a 3.9% stake in the Indian insurer worth £530 million at current market prices. Shares were down 0.5% to 276.1p.
ENERGY SERVICES WEAK
Drilling rig specialist Lamprell (LAM) warned that it faced a period of severe liquidity constraints until ‘critical’ new funding was identified and that therefore there were ‘material uncertainties relating to the going concern assumption’.
‘To fulfil its near-term working capital needs and then to meet its medium term strategic objectives, the group must complete a new funding arrangement of $120-$150 million by the end of Q3 2021 through debt and/or equity’, the company added. Shares slumped more than 26% to 50.1p.
Energy services group Hunting (HTG) posted a return to positive operating profits in the second quarter driven by an improving market in US onshore oilfield activity despite ‘strong capital discipline’ by energy firms.
The firm pointed to a ‘significantly improved outlook for the industry’ next year and beyond, supported by the strong oil price environment and rising cash flows among its customers. Nevertheless, shares fell 2.7% to 238.5p.
Shares in construction group NMCN (NMCN) were suspended at the company’s request a week after the firm announced it had struck a refinancing deal involving a deeply discounted share offer. Shares closed yesterday at 117.5p.
Fast-growing make-up and skincare brand Revolution Beauty outlined plans to float on AIM next month in a reported £500 million initial public offering.
The beauty brand, whose customers include Superdrug as well as US retail titan Target, has seen digital growth accelerate during the pandemic and institutional investor Jupiter Asset Management has pledged to subscribe for £90 million worth of placing shares.
