London’s blue-chip stocks remained subdued through the morning session on Friday, continuing a second half of the week sideways drift after the encouraging rally seen through Monday and Tuesday trading. UK investors seem to be happy sitting on the sidelines ahead of this afternoon’s US non-farm payroll numbers, which means missing out on the strong gains made in the US and Europe.
The pa-European Eurostoxx 50 index had chalked-up gains of 0.6% at midday on Friday, while all three major US markets made 1%-plus gains overnight. The S&P 500 and Nasdaq Composite set new all-time highs, closing at 3871.74 and 13777.74 respectively.
By contrast, the UK benchmark FTSE 100 managed to nudge just 0.05% (3.5 points) ahead at 6,507.19 at 12.30pm, 16% below its own 7,778.79 record of May 2018. Mid-caps were doing better, the FTSE 250 up 0.6% at 20.938.57.
THE BEAZLEY BOUNCE
Insurance company Beazley (BEZ) soared 16% higher to 373p after making reassuring noises over the return of dividend payments this year. Chief executive Andrew Horton said the company has the ‘capital strength to support our growth plans’ which will support shareholder payouts, news that was welcomed by investors.
The update came alongside word that Beazley swung to an annual loss in 2020 following a deterioration in its combined ratio amid a wave of Covid-19 related claims. However, gross written premiums jumped 19% to almost $3.6 billion, supported by rate rises across most of its divisions.
Pharmaceutical giant AstraZeneca (AZN) dipped 0.5% to £73.43 despite conceding that its head and neck cancer drug candidate Imfinzi failed to meet its primary and secondary objectives in a clinal trial.
Out of fashion chain French Connection (FCCN) surged more than 70% after confirming buyout talks with a pair of possible suitors. Both Spotlight Brands and Go Global Retail are mulling making a possible takeover, although talks with both potential acquirers ‘remain at a very early stage’.
The once cutting-edge fashion label has been struggling for years, which explains its microcap sub-£30 million valuation even after the stock surged 11p to 26.88p.
Life science investor Syncona (SYNC) has noted that its portfolio company Achilles Therapeutics expects to consider additional capital raising options this year, which could include an initial public offering in the United States. Its shares were up 1.2% to 256p.
Student residential real estate company GCP Student (DIGS) reported a slight decline in quarterly net assets and said it would collect between 55% and 60% of budgeted total income for the 2020/21 academic year as ongoing Covid-19 lockdowns dent occupancy. The stock stayed flat at 144.8p.
SMALL CAP WRAP
Warehouse REIT (WHR) plans to raise £45.9 million through a share issue to purchase more industrial units, weakening its stock price 2% to 124p. The group issuing is shares at 121p compared to the closing price of shares last night of 126p.
RF and microwave semiconductors developer CML Microsystems (CML) was virtually unmoved at 380p on news of its completion of the $49 million sale of its storage division Hyperstone to Swissbit. The disposal that will enable CML to refocus exclusively on the high-growth global communications market.
Cyber security services minnow Falanx (FLX:AIM) jumped nearly 12% to 1.34p on news of new contract wins and renewals across both divisions and that the company is in talks to secure the UK government-backed coronavirus loan to support acquisitions and growth.
African-focused Savannah Energy (SAVE:AIM) lost earlier strength to nudge just 1.8% ahead at 16.7p after inking a gas sales agreement with Mulak Energy, a deal that takes Savanah into a compressed natural gas market that chief executive Andrew Knott sees as ‘offering strong growth potential for our business over the course of the next decade’.
