Gilts: U.K. Government bonds drifted lower as investors continued to chase riskier assets such as shares. All eyes were on America, where further evidence should be forthcoming about the Fed’s thinking on QE. The September gilt future settled 32 ticks lower at 117.60. In the cash market, the yield on ten-year gilts rose less than one basis point to 1.89%.
Bet of the day: Pennon’s share price has reached a high for the year, buoyed in part by a bid for another water company, Severn Trent. But cautious spread-betters were selling ahead of annual results on Thursday. Punters reasoned that Pennon will need to deliver a terrific performance to sustain momentum.
Tiddler to watch: Firestone Diamonds improved 8.3% to 31/4p, after an update on financing for a treatment plant at its flagship Liqhobong gem mine in Lesotho. An “international bank” has signed up to lead the project finance for the plant, while talks are going well to forward-sell stones from the mine to cut the amount Firestone will need to contribute in equity finance.
Stock market climbs to its highest since 2000 bubble: The stock market rose to its highest level in nearly 13 years as investors continued to ignore an uncertain global economy. The FTSE 100 — which closed another 32.5 points higher at 6,755 — broke through its 2007 peak, when Northern Rock had collapsed but the global financial crisis had yet to begin in earnest.
Vince Cable demands increase in lending to small businesses by bailed-out bank: Royal Bank of Scotland is not trying hard enough to lend to the country’s small and medium-sized companies, the Business Secretary warned. Vince Cable said that RBS and Lloyds each needed to take more responsibility for the economic recovery by helping companies to grow, but added that one was “trying a bit harder than the other”.
Britons get Irish bank home loan reprieve: Bank of Ireland has relented over doubling the mortgage interest rates of 1,300 British customers. The group had planned to increase bills for 13,500 British customers on tracker mortgages, despite the fact that most mortgage consultants believed that tracker mortgages could not be raised unless bank base rate altered.
Goldman is cashing out of Chinese bank: Goldman Sachs is selling the last tranche of its shareholding in Industrial and Commercial Bank of China, amid fears of slowing profit growth in the country. It bought a stake in ICBC in 2006 during an initial public offering, using client and corporate funding to cash in on China’s burgeoning growth.
Sirius remains confident in potash project: Despite mounting disquiet from conservation groups, Sirius Minerals has insisted that it will be able to win permission for its controversial plan to build a potash mine in a national park in North Yorkshire.
Great Portland Estates: Rose 4½p to 598p, after pre-letting part of its New Fetter Lane building to Bird & Bird, the law firm.
Eden Research: Soared 55.7% to 13.625p, after its environmentally friendly pesticides received European approval.
Coms: Advanced a further 3.4% to 21/4p, after the internet telephony company declared that Simon Munro, a well-followed telecoms investor, had taken a 3.2% stake.
Rights issue plan derails FirstGroup: Shares in FirstGroup plunged 30% as investors balked at a £615 million rights issue and the scrapping of its dividend. Some income funds offloaded shares in the public transport group because of the axing of the final dividend, while other investors sold because of the size of the rights issue, likely to halve earnings per share.
ENRC co-founders in line to win with lowball bid, analysts say: The oligarchs bidding to take control of Eurasian Natural Resources Corp, the ailing FTSE 100 miner, are likely to get the company for a lowball price even though its independent board has rejected their first offer, according to analysts.
Mitie exits mechanical and engineering contracting business: Mitie has announced the closure of two lossmaking mechanical and engineering contracting businesses, as it seeks to focus on more lucrative facilities management, healthcare and energy services markets.
Petropavlovsk: Lost 1.2% to 128.2p, after Société Générale downgraded the Russian gold miner from “Buy” to “Sell”.
FirstGroup: Dropped 30.5% to 155.6p, after it set out a deeply discounted rights issue to preserve its credit rating.
ENRC: minorities deserve more: The scandal-tainted Kazakh miner has lurched from one self-inflicted mishap to another in the past year; its share price is the thermometer – down 43%. Now, as the U.K. Serious Fraud Office begins an investigation into the London-listed company, its founding oligarchs have come up with a buyout offer. Then again, ENRC may be worth a lot less as a listed company than it might be in private hands. The Founders and the Kazakh government, which own a combined 56% of ENRC, have offered 175p in cash and 0.231 of a share in Kazakhmys, another London-listed Kazakh mining company, for each ENRC share. That amounts to about 260p a share and values ENRC at £3.3 billion. Kazakhmys’s share price, meanwhile, is about 5% below the 370p used by the consortium in making the offer. The offer values ENRC at barely 2.5 times 2013 earnings before interest, tax, depreciation and amortisation. Analysts reckon that ENRC is worth upwards of £6 a share on a sum-of-the-parts basis given the quality of its assets.
Ryanair: options extra: The average ticket price last year on a Ryanair flight was about the same as the cost of 20 cappuccinos. More precisely, it worked out at €48, up 6% year on year – or perhaps a little more on an underlying basis since that includes bag charges, and fliers are finally wising up to the weighty additional costs that luggage entails. Passenger numbers grew 5%, which the low-cost carrier thinks will moderate to 3% in 2013-14. It also forecasts net profits of €570 million-€600 million for the current year. At the top end, that implies a 5% increase from 2012-13’s €570 million. Yet, in contrast to these seemingly modest growth numbers, Ryanair shares have risen 80% over the past 12 months, way above the one-third increase in the Euro Stoxx index. That leaves an obvious question for investors: how much upside remains? In terms of the immediate future, Ryanair has been cautious so often that the market tends to look well beyond management’s own forecasts. After all, a year ago, Ryanair talked of 2012-13 net profits of €400 million-€440 million, and the actual out-turn was 30% higher.
Gold: Chinese and Indian demand: Since China deregulated gold buying in 2002, the country has come from virtually nowhere to become the world’s second largest and, on occasion, largest gold buyer. India has been in the fray for longer. The two countries made up 55% of gold bar and coin purchases in the first quarter, up from 46% a year ago, according to the World Gold Council. Both add important features to gold demand. As BullionVault notes, they are more interested in physical gold buying over the type of investment demand driven by exchange-traded funds in the U.S. and Europe. And contrary to the belief that the Chinese only buy in a bull market, both countries look increasingly like opportunistic buyers. As prices started to fall coming into 2013, gold bullion sales to China surged by more than half in the first quarter from a year earlier and those to India jumped a fifth. The two countries also display seasonal swings in demand. The lack of investment choices and a risky financial system make demand for gold in China particularly attractive.
Running late: Martin Gilbert is finally jumping off the foot plate of FirstGroup, operator of the First Great Western rail franchise. It is clearly a wrench after 27 years during which FirstGroup has developed from a single bus depot in Aberdeen to the world’s biggest listed bus and rail operator, owning Greyhound buses and employing 120,000 staff. But Mr Gilbert should have gone much earlier. FirstGroup’s apologists argue that its difficulties are down to two bouts of bad luck: the first was buying Laidlaw, the U.S. bus operator, in 2007 just as the financial crisis hit; the second came a few months ago when the government ripped up its timetable for awarding rail franchises and derailed FirstGroup’s turnround plans. But Mr Gilbert was in charge when FirstGroup raised the debt to £2 billion and when the board committed itself to an aggressive dividend policy, promising 7% annual rises. The dividend cut and Monday’s £615 million rights issue may have been prompted by a threatened cut to FirstGroup’s credit rating but they have been on the cards for a while.
The Daily Telegraph
Warburtons buys garlic bread maker: The Bolton comedian Peter Kay famously expressed his exasperation at the invention of garlic bread, but that has not stopped Warburtons, the bakery company based in the North West town, from acquiring a leading manufacturer of the specialist bread.
Russia wants Bill Browder on Interpol list: The Russian authorities have escalated their attack on Bill Browder, the British hedge fund Boss spearheading an anti-corruption campaign against the Kremlin, by asking Interpol to place him under surveillance.
Japanese growth could be ‘sugar high’, warns former World Bank President Robert Zoellick: Japan’s 0.9% growth in the first quarter could just be a “sugar high” following the government’s massive stimulus measures, former World Bank President Robert Zoellick has said.
Royal Bank of Scotland: 15.1 better at 351.9p, after Numis upgraded the lender to “Buy” from “Hold”.
Bullish mood in City sends market up to 13-year high: London’s leading share index closed at its highest level in almost 13 years, raising hopes that it will break through the 7,000 point barrier for the first time by the end of 2013.
‘Market square’ mall to have local feel: The property giant British Land has revealed that a number of independent retailers will trade alongside the high street’s biggest names at its shopping centre in Fareham, Hampshire.
Food scares and new rules help us, says Cranswick Chief: Food scares and stricter pig production rules across Europe will all be good for the bacon, sausage and cooked meats group Cranswick, its Chairman said.
Think-tank joins the call for a freeze on high street rates: An influential think-tank has become the latest organisation to call on the Government to alleviate the punishing impact of business rates in an effort to curb the spiralling number of store closures on the high street.
Battersea Power Station project gains $1 billion sales: The developers of Battersea Power Station broke through the $1 billion (£660 million) sales barrier amid “phenomenal” interest in new flats and townhouses at the London landmark.
EU bonus cap could double bankers’ salaries, City regulator warns: A European plan to limit bankers’ bonuses could have the perverse effect of leading to a doubling of their salaries, the Chief Executive of the new City regulator, the Financial Conduct Authority, has warned.
Apple accused of ‘highly questionable’ billion-dollar tax avoidance scheme: Apple uses a “highly questionable” web of offshore entities to avoid paying billions in U.S. income taxes, a Senate committee alleged on Monday.
Petrol price rigging inquiry contacts oil traders: Glencore and other big oil trading companies have been asked to provide information to the cross-border investigation into alleged petrol price rigging. There is no suggestion that these companies are being investigated.
Supermarkets summoned to explain confusing pricing policies: The U.K.’s leading supermarkets have been asked to explain their confusing and inconsistent use of “unit prices” on food and drink products in the first step of a new government drive to help cash-strapped consumers work out which are cheapest.
Glencore is latest London-listed raw material firm linked to oil price fixing probe following BP and Shell’s surprise raids: Glencore became the latest London-listed natural resources firm to be linked to a probe into oil fixing. BP and Shell are already under the microscope.
Fidessa Group: Barclays initiated the stock with “Overweight” rating and a target price of 2500.00p
Tullow Oil: Sanford C. Bernstein & Co maintained an “Outperform” rating on the stock, with a target price of 1770.00p
E2V Technologies: Investec maintained a “Buy” rating on the stock, with a target price of 210.00p
Kier Group: Liberum Capital Ltd upgraded the stock to “Buy” and increased the target price to 1450.00p
WH Smith: Nomura downgraded the stock to “Neutral” and decreased the target price to 770.00p
Lamprell: Investec downgraded the stock to “Sell” and decreased the target price to 145.00p
FTSE rises to dotcom boom level: The index of Britain’s top quoted companies reached its highest level since the days of the dotcom boom in 2000 closing 32.57 points higher at 6755.63.
Actavis targets Irish drug firm: There was a flurry of takeover activity in the drugs industry as U.S. group Actavis launched a £3.3 billion bid for Ireland’s Warner Chilcott, which is listed in New York.
Yahoo nets Tumblr with a £720 million offer: Internet giant Yahoo is buying blogging firm Tumblr for $1.1 billion (£720 million) in a deal that will net the founder £164 million.
Fallon tells manufacturers to cut costs to compete overseas: Britain needs a leaner and more efficient manufacturing sector if the country wants to increase exports and boost the struggling economy, Business Minister Michael Fallon will argue in a speech.
Vodafone pulls out of bidding for BT mobile: Vodafone has pulled out of the bidding to operate BT’s forthcoming mobile network, leaving O2 as the frontrunner to win the potentially lucrative contract.
Dell committee refuses to open books to Icahn without answers: The committee overseeing a bidding war for embattled PC manufacturer Dell has knocked back activist investor Carl Icahn’s request to review the firm’s books.
Blackstone makes $680 million bid for China’s Pactera Technology: Pactera Technology International said that Blackstone Group, together with the company’s management, made a $680.3 million non-binding proposal to take China’s largest technology outsourcing firm private.
Ofgem under pressure ahead of the committee hearing: Labour lashed out at Ofgem for taking too long to address gas price-fixing allegations, equating the scandal to the one that hit the oil industry last week.
Supergroup appoints Canaccord Genuity: FTSE-250 clothing retailer SuperGroup, the group behind the popular Superdry brand, said it had appointed Canaccord Genuity as joint broker to the group.
StanChart buys Indian wealth business from Morgan Stanley: Standard Chartered revealed it is buying rival bank Morgan Stanley’s wealth management unit in India, expanding the scope of its Asian operations even further.
General Electric set to get a windfall from its finance arm: General Electric is set to get a $6.5 billion dividend from its financial unit GE Capital as part of a plan to reduce the size of the business.