Millennial highs!

February 24, 2014 07:12 AM
Playing FTSE with 15-year highs

U.K. stocks rose, with the FTSE 100 Index reaching its highest level since December 1999, while HSBC Holdings Plc posted profit that missed analysts’ estimates.

Dixons Retail Plc rallied 6.7 percent after saying it’s in talks to merge with Carphone Warehouse Group Plc. Bunzl Plc climbed 6.9 percent after posting a jump in full-year revenue, exceeding projections. HSBC, Europe’s largest bank, fell 2.8 percent. RSA Insurance Group Plc lost 3.7 percent as the insurer said it is considering a rights offering.

The FTSE 100 Index rose 27.8 points, or 0.4 percent, to 6,865.86 at the close in London. The gauge earlier fell as much as 0.6 percent before rallying in the final hour of trading. The FTSE All-Share Index gained 0.4 percent today, while Ireland’s ISEQ Index added 1 percent.

“European markets are focused on the macroeconomic picture within Europe,” Louis de Fels, a Paris-based fund manager at Raymond James Financial Inc., which oversees about $53 billion, said by telephone. “People want to buy domestically oriented stocks. You have money inflows and better economic data. The two combined help the market further, but we are not out of the woods yet. There will still be volatility in the markets.”

The number of shares changing hands in FTSE 100-listed companies was 24 percent higher than the 30-day average, according to data compiled by Bloomberg.

Dixons Retail

Dixons Retail rallied 6.7 percent to 50.3 pence. A merger of the largest U.K. consumer-electronics retailer and Carphone Warehouse would bring together companies with combined revenue of about 12 billion pounds ($20 billion). Discussions are at a preliminary stage and there is no certainty of a transaction taking place, the companies said today in a statement. Carphone jumped 8.8 percent to 333 pence.

Bunzl climbed 6.9 percent to 1,585 pence, the highest price since at least September 1988. The world’s largest distributor of disposable tableware and food packaging reported full-year revenue rose 12 percent to 6.1 billion pounds from a year ago, exceeding the average 6.07 billion pounds that analysts had projected.

Severn Trent Plc gained 1.2 percent to 1,830 pence, climbing for the fourth straight day to the highest price since November. RBC Capital Markets raised the water utility to sector perform from underperform, meaning that it no longer recommends selling the stock. The brokerage said that regulatory clarity will improve.

HSBC Falls

HSBC dropped 2.8 percent to 635.7 pence. Pretax profit for 2013 rose 9 percent to $22.6 billion from $20.7 billion in the year-earlier period, the London-based bank said in a statement. That missed the $24.6 billion median estimate of 30 analysts surveyed by Bloomberg.

RSA lost 3.7 percent to 97.5 pence. The car and home insurer may sell shares to replenish capital, according to a statement yesterday. The company added that it hasn’t taken a final decision yet. RSA may seek to raise as much as 800 million pounds and will cancel its 2013 dividend payment, the Sunday Times reported. The company will report its full-year results on Feb. 27.

Associated British Foods Plc dropped 2.4 percent to 2,920 pence. The sugar producer that also owns the Primark chain said profit in the first half will be similar to last year, with the growing retail business offsetting falling sugar prices.

Anglo American Plc lost 1.7 percent to 1,533.5 pence, while Rio Tinto Group declined 1.8 percent to 3,536.5 pence. Basic- materials stocks posted the second-biggest decline among 19 industry groups in the Stoxx Europe 600 Index.

Vodafone Shares

Vodafone Group Plc traded after an adjustment for the cash distribution and share consolidation resulting from the sale of its 45 percent stake in its wireless joint venture with Verizon Communications Inc.

Vodafone said it will give its shareholders about 29.53 pence a share in cash and six new shares for every 11 held. The wireless operator will also issue about 263 Verizon shares for every 10,000 Vodafone shares owned.

“A lot of the funds we’ve been speaking to are still not sure what they want to do with the cash or how they want to treat Verizon,” said Nick Lawson, head of synthetic distribution, macro sales and event-driven strategies at Deutsche Bank AG in London. “So the flows may take some time to be reinvested.”

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