Yahoo Finance FTSE 100 Live 04 July: Index higher, Smith & Nephew shares surge on activist stake
The FTSE 100 index is trading higher during a relaxed election-day session for financial markets.
Smith & Nephew shares surged to the top of the FTSE 100 after an activist investor took a 5% stake.
Meanwhile, City broker Peel Hunt and the landlords Great Portland Estates and Assura have posted updates.
FTSE 100 Live Thursday
Smith & Nephew stake lifts shares
Peel Hunt sees market uptick
Great Portland “virtually full”
City Comment: Will Reeves’ first weeks echo great drama of 1997?
13:25 , Jonathan Prynn
What, I wonder, will be Rachel Reeves’ Bank of England independence moment?
It seems hard to fathom that it is now 27 years since newly appointed Labour Chancellor Gordon Brown stunned the City just 100 hours after Tony Blair’s landslide election win by handing control of interest rates to an independent Bank of England.
It was a moment of supreme drama that also made complete economic sense and has stood the test of time. There are few voices clamouring for a return to political rate-setting even if the Bank gets occasional stick from its elected masters.
The move also sealed Brown’s status as an homme sérieux up for big decisions despite his lack of ministerial experience.
Rachel Reeves is a Threadneedle Street alumnus don’t forget and that is a big part of Labour’s “sell” to the markets and business. But she will surely also want to stamp her authority early on with a big announcement that demonstrates that she commands all she surveys. However, I expect this will be related to growth — a keystone of Labour’s “Change” message — rather than monetary policy, especially as the hard yards on inflation appear to have been largely completed under the Tories.
One thing she will probably not have to worry about is the markets. The City has been pricing in a huge Labour majority for many months, now and the work that she and Keir Starmer have done in convincing business that they will be responsible stewards of the economy means that there is unlikely to be a strong reaction when it wakes up to a new Labour dawn tomorrow.
I fear it will be a short honeymoon however. One early flash point could be public sector pay. The big unions have been very quiet during the election campaign, so as to not rock the boat, but will be expecting far more generous treatment from a Labour administration than its Tory predecessors. But Rachel Reeves will clearly have to resist to maintain her hard won credibility. Watch this space.
Smith & Nephew leads FTSE 100, Spectris deal boosts shares in FTSE 250
10:13 , Graeme Evans
Smith & Nephew shares today surged 6% or 62.3p to 1048.5p amid hopes that the 5% position of activist investor Cevian Capital will help to fire up the company’s turnaround progress.
The shares are still 12% down over the past year, despite chief executive Deepak Nath’s 12-point plan to make Smith & Nephew a “consistently higher growth company”.
The orthopaedics, sports medicine and wound management business, whose board is led by former Serco boss Rupert Soames, generates more than 50% of its revenues in the US.
Cevian typically remains invested in companies for five or more years, having previously taken positions in Vodafone and Aviva.
Its stake building provided the main interest during a relaxed election-day session for blue chip investors, with the FTSE 100 index up 0.7% or 53.61 points to 8224.73.
Bunzl featured on the risers board after analysts at HSBC gave the distribution and outsourcing business a “Buy” recommendation and 3460p price target. Shares rose 2% or 72p to 3104p.
Other risers came from the aerospace sector as GKN owner Melrose Industries lifted 16.2p to 575p and Rolls-Royce added 7.1p to 462.9p.
Retailer Next led the FTSE 100 fallers board, down 104p to 9008p as the shares began trading without the right to the latest dividend award.
The UK-focused FTSE 250 index put on 85.32 points to 20,614.74, with under-pressure Aston Martin Lagonda and Ocado on the recovery trail after gains of 4.1p to 149p and 8p to 308.6p respectively.
Precision measurement firm Spectris rose 84p to 2934p after announcing a £205 million deal to buy Boston-based materials analysis firm SciAps, a move that will boost its position in markets including mining, batteries and pharmaceuticals.
Utmost to take on Lombard assets
09:10 , Simon English
Wealth manager Utmost Group today said it would takeover rival Lombard International, adding around £43 billion in assets under administration.
Utmost, owned by private equity house Oaktree and by management, is taking out a £200 million loan to fund the deal. Lombard will need further funding after that to grow.
Paul Thompson, CEO of Utmost, said: “The combined strength of the merged Utmost International and Lombard International gives added scale to the Group. It will enable us to better serve our expanded international client base and distribution partners, utilising deep market insights, strong technical expertise and a broader portfolio of products.”
Ahead of the deal, Utmost looked after nearly £63 billion of assets for around 500,000 clients.
Florent Albert of Lombard said of Utmost: “I am confident that they will be excellent stewards for Lombard International’s clients, partners and employees.”
Peel Hunt sees signs of a market pick-up
08:56 , Simon English
CITY investors were betting on better times ahead today after a long period of stagnation due to uncertainty around interest rates and inflation.
Peel Hunt said at its AGM today that it has “seen some improvement in the macroeconomic backdrop since the start” of the year, “with tentative signs of a pick up in equity capital markets”.
The broker also says it has been “encouraged by an increase in activity” among clients looking to trade and make deals.
That sentiment is echoed across town, with stock brokers and fund managers noting greater enthusiasm for UK shares and for buying UK companies.
Sterling was today at a three year high against the dollar at $1.28.
That was partly election optimism, but also a recognition that US interest rates may go up more slowly than those in the UK.
The FTSE 100 opened up 47 points higher at 8219 as voting began in the general election.
Derren Nathan, head of equity research at Hargreaves Lansdown, said:
“The FTSE 100 has followed the rally in other overseas markets opening up 0.45% to over 8,200, as the UK braces for the electorate’s decision. Opinion polls are suggesting one of the biggest landslides the nation has ever seen for Labour, but they have been wrong before.”
Currency markets will be watched closely when exit polls first emerge at around 10pm.
Neil Wilson at markets.com said: “I don’t think we see massive moves on the results. A thumping Labour win seems fully priced but we are not sure if the market is ready for what that will mean.”
Labour has worked hard to win over the City as it tired to back up claims it will be the “party of business”.
City investors in particular hope Labour will relax rules on pension funds, making it easier for them to take greater risks that boost infrastructure and the share market.
The City hopes it can attract the £50 billion float of Chinese fast-fashion house Shein in order to kick-start a big year of companies coming to London rather than leaving it.
Smith & Nephew surges 7% on activist buying, FTSE 100 higher
08:40 , Graeme Evans
London shares have posted a stronger-than-expected performance, with the FTSE 100 index up 49.76 points at 8220.88.
Smith & Nephew shares lead the top flight, jumping 7% or 66.8p to 1053p after activist investor Cevian Capital disclosed a 5% shareholding.
Other stocks on the front foot include Rolls-Royce, which improved 5.6p to 461.4p, and NatWest after a gain of 3.1p to 324.6p.
Retailer Next is top of the FTSE 100 fallers board, with the decline of 130p to 8982p reflecting the impact of the stock being marked ex-dividend.
The UK-focused FTSE 250 index stood 35.18 points higher at 20,564.60, with the GKN Automotive business Dowlais up 2p to 71.6p.
Major London landlord Great Portland Estates says its properties 'virtually full'
07:46
Great Portland Estates, the major London landlord, hailed “strong” leasing demand today and said its portfolio was “virtually full”.
Nonetheless, it signed £4.3 million’s worth of letting deals for its shops and offices.
That included bringing the British luxury retailer, REPRESENT to 141 Wardour Street in the West End for its a new flagship store. It is the brand’s second shop after one in West Hollywood in Los Angeles.
Toby Courtauld, chief executive, said: “We are well placed to take advantage of both the strength in occupational markets and the current disruption in London's investment market.”
Doctors surgery and health centre landlord Assura points to 'UK healthcare crisis'
07:33 , Michael Hunter
Assura, the property trust which specialises in doctors’ surgeries and health centres, said today it was “extremely well-placed to help support the NHS”.
The FTSE 250 company said:
“The UK healthcare crisis is getting more severe by the year, which in turn is driving increased demand for healthcare infrastructure.
“The requirement for investment in this space has received cross-party political support, and we look forward to working with whichever party is in Government following today's election.”
Assura has work already underway on five developments and has five more in its “immediate development pipeline”, with 15 more ahead over the next two years.
It said its portfolio of 612 properties had an annualised rent roll of £149.2 million, down from £150.6 million.
FTSE 100 seen higher, US markets set fresh records
07:14 , Graeme Evans
The S&P 500 index and Nasdaq set more records yesterday after closing 0.5% and 0.9% higher respectively, whereas the Dow Jones Industrial Average finished slightly lower.
US markets are closed today, meaning a low key session is on the cards for London traders after the FTSE 100 index rose 0.6% yesterday.
Futures trading points to a rise of 14 points to 8185 when the London market opens later.
In Asia, the Nikkei 225 continues to perform strongly after adding 0.9% in today’s session. In contrast, the Shanghai Composite is 0.6% lower and the Hang Seng index broadly flat.
Brent Crude is slightly higher this morning at $86.85 a barrel, while the pound stood at $1.2747 as polling stations opened in the UK.
Recap: Yesterday's top headlines
07:05 , Simon Hunt
Good morning from the Standard City desk.
It may not be the sexiest headline ever seen but yesterday’s agreement over 5G network sharing between Vodafone and Virgin Media 02 could prove one of the most pro-growth business deal sealed in this country for a long while.
The smart piece of corporate footwork cleverly takes away one of the key potential regulatory objections to Vodafone’s planned merger with its UK competitor Three by giving VM02 the right to buy more network spectrum if the combination goes ahead.
That should unlock around £11 billion of investment in a network that is in danger of falling dangerously behind those of other major economies. The UK was one of the first countries to start the roll-out of 5G in 2019.
But by last year it had fallen to 39th among 56 advanced and developing markets for 5G availability, and 21st out of 25 developed markets for download speed with France. Germany and the Netherlands all ahead.
Successive Vodafone bosses have been making the case for consolidation in the sector for years now - and if course it suits their book. But in this case, for once, the interests of the corporate entity and the common weal are aligned.
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Here’s a summary of our other top headlines from yesterday:
Games developer Keyword Studios agrees to reduced £2.1 billion takeover offer from Scandinavian led private equity consortium
GSK to pay up to €1.4 billion for the full rights to mRNA flu and Covid-19 vaccines shots it was developing with CureVac NV
Topps Tiles sees no pick up in demand as housing market continues to stagnate
Hawksmoor steak chain “up for sale with £100 million price tag.”
