News Column

InterContinental Hotels among high risers

May 3, 2014

Britain's top share index hit a fresh two-month high yesterday, with RBS and InterContinental Hotels the most notable risers on the back of robust earnings, as investors also welcomed strong US jobs growth.

Shares in AstraZeneca, which have surged almost 30% since US rival Pfizer indicated in April it wanted to buy the British drugmaker, were initially flat after a sweetened pound(s)63 billion takeover bid was rejected by AstraZeneca's board.

Astra's shares closed the day 7p lower at 4808p.

That is still well short of the pound(s)53 a share that some analysts think Pfizer will have to pay.

Meanwhile Part-nationalised RBS surged 25.1p, or 8.2%, to 331.7p, after trebling its profit in the first quarter, benefiting from improved cost control and a reduction in losses from bad loans.

Jefferies said the bank's earnings were more than twice consensus estimates, with impairments 48% below forecast.

Also rising after robust results was InterContinental Hotels Group, which proposed a special dividend along with its strongest room revenue performance in seven quarters.

Its shares jumped up 166p, or 8.1%, to 2190p.

"InterContinental has delivered a stellar performance. Growth in revenue per available room is ahead of expectation, while the return of hotel sale proceeds in the form of a special dividend is ahead of schedule," Hargreaves Lansdown Stockbrokers equity analyst Keith Bowman said.

Meanwhile, non-farm payrolls showed the US economy added 288,000 jobs in April, beating a 210,000 consensus forecast and fuelling the view that the world's biggest economy is regaining pace after bad weather hit growth early in the year.

Housebuilders were among other stocks on the front foot after the latest construction industry figures from CIPS and Markit showed the sector continued to enjoy strong growth in April.

Barratt Developments was 6.6p higher at 375p, Taylor Wimpey improved 3.3p to 108.6p and Redrow lifted 13.6p to 305p after brokers Citigroup said investors should revisit the sector following recent reductions in share prices.

In other corporate news, Direct Line Insurance Group shares were 1.2p higher at 249p after it said weather claims in the first quarter will be pound(s)60 million, better than the range of pound(s)70 million to pound(s)90 million that had been previously forecast.

The biggest FTSE 100 risers were InterContinental Hotels up 166p at 2190p, Royal Bank of Scotland ahead 25.1p at 331.7p, Kingfisher up 8.4p at 426.4p and Antofagasta ahead 14.5p at 790.5p.

The biggest fallers were Associated British Foods down 97p at 2900p, Hargreaves Lansdown off 22p at 1193p, British American Tobacco down 52.5p at 3396.5p and Johnson Matthey off 51p at 3308p.

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Source: Herald, The (Scotland)

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