FTSE edges higher as Barclays pleases

Source:FT.com Author:Neil Hume & Robert O Date:03/25/14 Click:

Shares in business travel company Hogg Robinson gained 7 per cent to 61p Tuesday because of rumours it could be a takeover target for BCD, a family-owned rival with a large presence in the US travel market.

Shortly before Christmas, Beverweerd Investments declared a 4.3 per cent holding in HR.

Beverweerd is a nominee account for Boron Management, which in turn is thought to be the investment vehicle of John Fentener van Vlissingen, who founded BCD Holdings in 1975 and is its chairman.

BCD and HR worked closely together until BCD bought the travel solutions division of Tui and The Travel Co.

Analysts believe that BCD still needs to bulk up its European operations. They think an acquisition of HR would be the quickest way to achieve that and compete with market leaders American Express and Carlson Wagonlit.

Traders said it was also possible that Beverweerd Investments had acquired more HR stock Tuesday and on Friday when volumes were high.

The FTSE 100 recovered from early weakness in a volatile session to trade briefly above 6,000 points. But with Wall Street falling back from its opening highs the FTSE 100 closed up just 20.3 points, or 0.3 per cent, at 5,966.9.

The heavyweight banking sector was the main reason the market closed higher. A reassuring trading statement from Barclays (NYSE:BCS), up 3.7 per cent to 477p, helped HBOS gain 3.1 per cent to 659p, Lloyds TSB rise 1.8 per cent to 432p and Royal Bank of Scotland improve 1.6 per cent to 366¾p. Shares in Alliance & Leicester, the mortgage lender, fell 3.2 per cent to 528p as investors sold prior to Wednesday's annual results.

The FTSE 250 rallied 124.6 points, or 1.2 per cent, to close at 10,208.6.

InterContinental Hotels Group topped the FTSE 100 leaderboard. Shares in the hotel operator rose 7.3 per cent to 828p after full-year results met expectations.

Lonmin, the South African focused mining group, added 1.7 per cent to £34.63 as platinum remained strong.

Investec Securities lifted its 2008 platinum price forecast to $1,800 an ounce but said Aquarius Platinum, up 5.9 per cent to 794p, was the best way to play that trend. "We believe Aquarius is better positioned to work around the South African power constraints and has less internal issues that may upset production," it said. It reiterated its "buy" recommendation.

On the downside, the London Stock Exchange dropped 6.4 per cent to £15.64 as takeover hopes faded. The chairman of Borse Dubai was Tuesday reported as saying that the group would be willing to sell its stake to Qatar Investment Authority, a move that would in effect end any hope of a bidding war between the Middle Eastern investors.

Cadbury Schweppes (NYSE:CSG) dropped 5.4 per cent to 579½p after surprising the market with news that it would not be returning any cash to shareholders after the demerger of its US soft drinks business.

Among mid caps, Cookson added 5.4 per cent to 579½p after Morgan Crucible, which makes ceramic components, reported a pick up in sales. "Results from Morgan Crucible read very differently from the very disappointing trading statement of 3 December," Andrew Carter, analyst at Landsbanki, said. Morgan Crucible rose 8.4 per cent to 213p.

Tate & Lyle, the sugars and sweeteners group, eased 2.4 per cent to 512p even though Harbinger Capital, the US activist investor, announced an increased holding of 14.3 per cent.

BlueBay Asset Management was marked 4.2 per cent lower at 240p ahead of Wednesday's half-year figures.

Mitchells & Butlers, the pub and restaurant operator, rose 0.9 per cent to 449p after a block of 20m shares, nearly 5 per cent of the company, changed hands at 440p.

The talk in the market was that financier Robert Tchenguiz had added to his 23 per cent stake. However, dealers thought that theory was wide of the mark and the trade was just an investor moving stock from one broker to another.

A large block of shares in J Sainsbury, 0.3 per cent lower at 381½p, was also traded. But again dealers believed it was simply a case of stock being moved from one account to another.

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