UK stocks made steady progress on Tuesday with the FTSE 100 index gaining 22 points or 0.3% to 7,095 points on positive news for house builders.
In contrast, Asian markets slipped overnight as global sentiment weakened on concerns that new coronavirus outbreaks in the region could hamper a recovery.
Sterling remained in the doldrums, trading a $1.3860 against the dollar, while gold was not far off its recent lows at $1,775 per ounce.
Oil prices dipped slightly after their recent strong advance, with Brent crude futures trading at $74.10 per barrel.
COMPANY NEWS
House builders 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. Shares in Barratt Developments (BDEV), Persimmon (PSN) and Taylor Wimpey (TW.) gained between 1% and 2% in early trading.
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. Shares in Countryside inched up 0.8% to 489p.
Rumours of private equity interest lifted shares in office rental firm IWG (IWG) by 6% to 319p in early trading. News reports suggest IWG 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 0.4% to £10.70.
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 added 0.4% to 280p.
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 fell 20% to 54p.
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 4.4% to 234p.
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.
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