The FTSE 100 fell into the red on Monday morning as the coronavirus death toll eclipsed Sars, with investors concerned about the impact the virus will have on manufacturing in China and the surrounding region.
The UK’s benchmark index opened 0.22% lower to 7,462.05, taking its lead from Asian stock markets which also dropped in morning trade.
Japan’s Nikkei 225 fell 0.6%, the Hang Seng in Hong Kong dropped 0.7%, and China’s Shanghai Composite was down 0.1%.
Oil prices also dropped, with brent crude futures down 0.35% to $54.28 a barrel, as traders assess what impact the coronavirus fallout will have on China’s oil demand.
INTU IN TALKS WITH ‘CORNERSTONE INVESTOR’
In company news, struggling shopping centre operator Intu (INTU) jumped 6% to 14.5p after confirming reports it is in talks with a major property investor among others about raising new funds.
Intu has been struggling with a £5bn pile of debt, and a report in the Sunday Times yesterday said Hong Kong-based Link Real Estate Investment Trust - which has a market cap of £17bn - is in talks with Intu about becoming the ‘cornerstone’ investor in a fundraising alongside the firm’s full year results.
Confirming the report today, Intu said it is engaged in ‘constructive discussions’ with shareholders and ‘new investors including Link Real Estate Investment Trust and others’ about a proposed equity raise alongside its results at the end of February.
But it added, ‘There can be no certainty that the equity raise will be implemented nor as to the terms on which any such implementation might occur.’
NMC GETS ‘HIGHLY PRELIMINARY’ BID APPROACH
Embattled healthcare operator NMC Health (NMC), which has been the subject of a short attack in recent months, soared 8% to 756p after confirming media reports that it has received a takeover approach.
Private equity firms Kohlberg Kravis Roberts (KKR), which formerly owned pharmacy giant Boots, and GK Investment Holding are reportedly interested in NMC Health, though according to a report in the Mail on Sunday the company’s volatile share price has made it difficult to agree a price.
In a statement NMC confirmed it has received ‘highly preliminary approaches’ from the private equity firms, but added that no proposal has yet been made and there has yet to be any discussions about the terms of any potential offer.
LOK'NSTORE GAINS ON STRONG UPDATE
Self-storage provider Lok’nStore (LOK:AIM) gained 1.4% to 730p following a strong half-year trading update in which like-for-like revenue in the six months to 31 January increased 7%.
At 31 January 2020 unit occupancy was up 7.9% and price per let sq. ft. was level compared to the same date twelve months ago, the firm said.
It added that its new stores in Leicester and Gloucester are due to open before the end of its financial year, with its total new store pipeline now fifteen sites, taking the firm to 49 stores when fully developed.
WORKSPACE HIRES WHITBREAD FINANCE BOSS
Office landlord Workspace (WKP) rose 0.2% to £12.39 after announcing that it had appointed a new chief financial officer.
David Benson, currently corporate finance director at Premier Inn owner Whitbread (WTB), will join Workspace in April and become a member of its executive committee.
Commenting on the appointment, Workspace CEO Graham Clemett said: ‘David combines a strong commercial focus with broad finance skills and a wealth of experience that will help support our ambitions as we continue to build on our leading market position.’
ULTIMATE PRODUCTS MONITORS VIRUS IMPACT
Consumer goods group UP Global Sourcing (UPGS), also known as Ultimate Products, dropped 6.5% to 61.26p on warning that it was monitoring the impact of the coronavirus outbreak on its business in China.
In a trading update the firm said, ‘The extension of the Chinese New Year holiday by nine days to today (Monday 10 February) in the Group's main manufacturing areas is expected to cause production delays.
‘As further information becomes available, we will continue to evaluate any short or long term impact on the group's business and take all necessary action to mitigate any disruption.’
Ultimate Products also reported that its first-half revenue had grown by 2.8%.
OTHER NEWS
Podcast company Audioboom (BOOM:AIM) jumped 21% to 270p on announcing that it was evaluating strategic options to boost value for shareholders, including a potential sale of the company.
Business technology group Watchstone (WTG:AIM) added 4% to 154.5p as it revealed plans to return at least £50m to shareholders following the sale of its Canadian assets.
Shanta Gold (SHG:AIM) gained 5.4% to 11.62p, having agreed to acquire gold projects in Kenya from larger rival Barrick Gold for $14.5m in cash and shares, plus an ongoing royalty payment.
Fishing equipment retailer Angling Direct (ANG:AIM) fell 2.1% to 67.05p as it said in a statement that chief executive Darren Bailey has decided to step down with immediate effect.
