Investors in London showed confidence on Monday, as Ocado boosted the FTSE 100 despite shareholder pressure to move its listing to the US, while takeover talks drove Hipgnosis Songs Fund and Tyman in the FTSE 250.
Amongst individual stocks, Ocado boosted the FTSE 100 on pressure to move to the US. The FTSE 250 got a boost from takeover talks for both Hipgnosis Songs Fund and Tyman.
The FTSE 100 index was up 112.16 points, 1.4%, at 8,008.01. The FTSE 250 was up 180.81 points, 0.9%, at 19,572.11, and the AIM All-Share was up 3.01 points, 0.4%, at 748.68.
The Cboe UK 100 was up 1.4% at 799.63, the Cboe UK 250 was up 1.0% at 16966.34, and the Cboe Small Companies was up 0.3% at 14,834.74.
In European equities on Monday, the CAC 40 in Paris was up 0.3%, while the DAX 40 in Frankfurt was up 0.7%.
‘The FTSE 100 bounced back strongly on Monday amid relief that tensions in the Middle East seem to have been contained for now,’ said AJ Bell analyst Russ Mould.
For now, eyes are on both personal consumption expenditure price index and gross domestic product data in the US. These may yield hints about the US Federal Reserve’s potential interest rate cuts.
Analysts at ING commented: ‘In the coming days, data should regain its role as the main market driver; US GDP and PCE may come in relatively strong and prevent dollar momentum from softening much.’
The pound was quoted at $1.2344 at midday on Monday in London, lower compared to $1.2410 at the equities close on Friday. The euro stood at $1.0650, lower against $1.0664. Against the yen, the dollar was trading at JP¥154.75, higher compared to JP¥154.52.
In the FTSE 100, Ocado rose 4.3%, as shareholders pushed the company to shift their listing over to the US
On Saturday, the Telegraph reported that the grocer and warehouse technology firm has had face-to-face talks with investors, a New York listing was a prospect that was discussed.
The Telegraph noted that ‘one leading fund manager’ said they would like to see Ocado explore a ‘trans-Atlantic shift’.
‘While Ocado is best known to the UK public for its grocery delivery service, the company’s future lies in the provision of technology and robotic systems to power grocery warehouses. It has a partnership in the US with Kroger, one of America’s largest grocery retailers, and that association could help it appeal to investors in the country,’ said AJ Bell’s Mould.
Other London listed retailers got a boost on Monday. Marks & Spencers, Sainsbury’s, and B&M were up 3.5%, 3.4%, and 2.4%, respectively.
In the FTSE 250, Tyman shares jumped 31% to 388.50p. It agreed to a £788 million takeover offer from US peer Quanex Building Products.
The cash and shares bid values each Tyman share at 400 pence each, based on the Quanex closing share price of $34.64 on Friday in New York.
Tyman Non-Executive Chair Nicky Hartery said: ‘In the context of a rapidly evolving North American marketplace, our board ultimately determined that this transaction is the best path to maximising value for Tyman shareholders, who will be able to realise a meaningful portion of their holding in cash at a significant premium to the prevailing share price while also participating in the future upside of the enlarged group.’
Hipgnosis Songs Fund rose 9.9% to 101.00p, after it said it would be ‘minded’ to accept an official cash bid from Blackstone, should one be forthcoming.
Hipgnosis Songs Fund, a music investment company, which has bought up the royalty rights to song catalogues of artists including the Red Hot Chili Peppers, Journey and Neil Young, had accepted a $1.40 billion bid from Alchemy Copyrights on Thursday. Alchemy trades as Concord Chorus Ltd.
The Blackstone bid values each Hipgnosis Songs Fund share at $1.24 each, the company overall at $1.50 billion.
On the other hand, Mobico lost 8.4%, after it released its delayed 2023 results.
The Birmingham-based public transport provider, formerly known as National Express, had pushed back publication of its 2023 figures as it clarified accounting issues at its German rail business.
Mobico announced a 2023 pretax loss of £98.3 million, narrowed from £225.3 million the year prior. Revenue rose 12% to £3.15 billion from £2.81 billion.
The total dividend was slashed to 1.7p per share from 5.0p.
Amongst London’s small-caps, PayPoint rose 8.8%.
The payment services provider said it remains on track to deliver around £80 million in underlying earnings before interest, tax, depreciation and amortisation for the current financial year to March 31, up 31% from £61.3 million in financial 2023, and underlying pretax profit in line with undefined expectations.
‘The strength of this performance, underpinned by sustained strong cash flow and our confidence in the delivery of continued growth and achieving our financial targets, has enabled the board to now have under active consideration a share buyback programme to further enhance shareholder returns,’ PayPoint said.
Stocks in New York were called higher. The Dow Jones Industrial Average was called up 0.5%, the S&P 500 index up 0.6%, and the Nasdaq Composite up 0.8%.
Brent oil was quoted at $86.65 a barrel at midday in London on Monday, down from $87.01 late Friday.
Gold was quoted at $2,360.80 an ounce, down against $2,391.85.
Still to come on Monday’s economic calendar, there is a eurozone consumer confidence reading.
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