LONDON (Alliance News) - The following stocks are the leading risers and fallers within the main London indices midday Thursday.
FTSE 100 - WINNERS
London Stock Exchange Group, up 6.3%. The group said it has agreed to acquire Russell Investments from Northwestern Mutual for USD2.70 billion in cash, as it seeks to broaden its scope in the US. The LSE said it intends to fund the acquisition with USD1.60 billion in net proceeds from a rights issue to take place in September, with the remaining USD1.10 billion through bank debt. The news comes just over a month after the LSE entered exclusive talks over a potential deal. The acquisition will enable it to combine Russell's index business with FTSE, bringing together USD5.2 trillion of assets benchmarked to Russell and an estimated USD4.0 trillion of equities benchmarked to FTSE.
Persimmon, up 4.2%, and Barratt Developments, up 3.7%. Housebuilding stocks have jumped following the release of the financial stability report from the Bank of England. The central bank said that it does not believe that household indebtedness poses an imminent threat to the UK's economic stability, but recommended that mortgage lenders should limit the proportion of mortgages at loan-to-income multiples of 4.5 and above to no more than 15% of their new mortgages. Further, the Financial Policy Committee said mortgage lenders should apply an interest rate stress test that assesses whether borrowers could still afford their mortgages if the bank rate were to be 3 percentage points higher than the prevailing rate during the first five years of the loan. However, Bank of England Governor Mark Carney said that the measures are not expected to have a "material impact" on mortgage lending and housing transactions in the short term.
Travis Perkins, up 3%. Like the housebuilding sector, the British builders' merchant and home improvement retailer is up on the back of the financial stability report from the Bank of England.
Vodafone, up 2.1%. Macquarie has upgraded Vodafone to Outperform, from Neutral, increasing its price target to 220 pence from 205p. "Revenue trends are nearing a low, the dividend is secure for at least three years and the combination of customer base repricing, Project Spring, and convergent solutions give Vodafone the tools to compete," said Guy Peddy, an analyst at Macquarie. The so-called Project Spring programme is using some of the billions Vodafone received from the sale of its stake in Verizon Wireless to bolster its 3G and 4G networks as well as its customer offering.
Petrofac, up 1.9%. The company said it has signed a USD1.25 billion energy infrastructure agreement with First Reserve to create a new business to buy new and existing energy projects. It said the new business, to be known as PetroFirst Infrastructure Partners, will buy a number of existing assets from Petrofac's Integrated Energy Services division, as well as new energy infrastructure projects that utilise Petrofac's development capability.
FTSE 100 - LOSERS
Barclays, down 4.7%. Shares in the bank have fallen after New York state's top law enforcer filed fraud charges against Barclays over its dark pool, LX Liquidity Cross, alleging that the bank has favoured high-frequency traders at the expense of other investors. Eric Schneiderman, the state attorney-general, accused Barclays of demonstrating a "disturbing disregard" for its investors in a "systematic pattern of fraud and deceit". The complaint alleges that Barclays has actively sought to attract high-frequency traders by giving them "systematic advantages" over others trading in its own dark pool. The complaint alleges that Barclays falsified marketing material purporting to show the extent and type of high frequency trading in its dark pool.
Standard Chartered, down 5.8%. The UK-based emerging markets-focused bank's shares have fallen sharply after it said it expects its first-half operating profit to be down by about 20% when it reports its interim results in August, hit by a poor performance in its financial markets business. It said that it also expects its first-half income to be down by a mid single-digit percentage from a year before, hit by an increase in loan impairments and a tough time in India, Korea and Singapore offsetting income growth in China and Africa. Its comparisons for operating profit and income include exclude the UK bank levy, own credit adjustments, and goodwill impairment in Korea. "This has been a disappointing first half, with difficult trading conditions, particularly in financial markets," Chief Executive Peter Sands said in a statement.
FTSE 250 - WINNERS
Redrow, up 5.6%, Foxtons Group, up 5%, Taylor Wimpey, up 4.9%, Bellway, up 4.1%, Bovis Homes Group, up 3.5%, and Berkeley Group Holdings, up 3.5%. The companies are all among the leading risers in the mid-cap index following the financial stability report from the Bank of England.
Bwin.Party Digital Entertainment, up 5%. The online gambling company has released a statement responding to a Bloomberg article, citing two people familiar with the matter, that said the company is considering selling some or all of the company as part of a strategic review. Bwin.Party said it has no plans to break-up or sell the company.
FTSE 250 - LOSERS
DS Smith, down 4.5%. Shares in the company have dropped even though it said that its full-year pretax profit more than doubled as revenues rose on organic growth and the first 12 month contribution from the SCA Packaging business it acquired in 2012. The company warned that it still expects a "difficult consumer economic environment to remain", and, when combined with negative forex impacts, this could potentially lead to 2015 full-year earnings per share downgrades of 1% to 3%, says Justin Jordan, an analyst at Jefferies. The analyst also points out that DS Smith currently trades on a price-to-earnings ratio of 13.1 times forecast 2014 calendar year earnings, which represents a 10% to 20% premium to its European packaging peers.
Ophir Energy, down 4.2%. The oil and gas exploration company's shares have fallen sharply after it said that it has concluded drilling operations on the Okala-1 well in the Mbeli Block offshore Gabon, but failed to find any significant oil.
AIM ALL-SHARE - WINNERS
LightwaveRF, up 89%. The radio frequency technology company, which produces technology allowing household lighting, heating and security systems to be operated remotely using smartphones, tablets or computers, has seen its shares move sharply higher after it said that its live user base who are regularly connected to home devices via its app has surpassed the 20,000 mark. To celebrate this, the company said that, following an approach by Apple, it has been accepted as an Apple MFi developer, allowing it to use the Apple MFi logo to promote its products for iPod, iPhone, and iPad.
Hurricane Energy, up 41%. The newly-listed UK oil and gas development and production company's shares have jumped after it successfully completed testing of a horizontal appraisal well at its Lancaster fractured-basement oil discovery off the west coast of Shetland. The company said production tests at the site achieved a sustainable oil flow rate of 9,800 stock tank barrels of oil per day, and testing has now been suspended as it becomes a future producer. The Lancaster Field, which is 100% owned by Hurricane, has estimated 2C Contingent Resources of 207 million barrels of oil equivalent.
Petards Group, up 20%. The developer of security and surveillance systems said it has won an initial five-year deal worth more than GBP1.5 million to supply Siemens AG's rail division with its train-related products and services. The contract is renewable annually after the initial term. Petards makes systems like CCTV for trains.
Pinnacle Technology Group, up 19%. The IT services company posted a widened pretax loss in the half year to end-March, although it said it is confident it will return to profitability thanks to the turnaround programme being implemented under its new chief executive. It posted a pretax loss of GBP1.2 million, widened slightly from GBP1.1 million in the previous year, as revenue declined to GBP4.3 million, from GBP5.4 million, due mainly to a 64% decline in revenue in its IT security business. The revenue decline was partly offset by lower cost of sales and lower operating expenses. The company said the "disappointing" first-half results represented a "work-in-progress" in the midst of a difficult and protracted turnaround. It said that current management had inherited a loss-making business "built up from a wide variety of disparate acquisitions which had never been integrated into an efficient corporate structure".
Progility, up 16%. The management services company said its full-year results for the year to end-June will be in line with market expectations, despite the weaker Australian dollar, as it saw "significant progress" in its second half. It said it had acquired three new businesses over the last year under its new senior management team, which had more than doubled the size of its business. It has also refocused and restructured its historic training business. It is now seeing the benefits of its new strategy, booking new contract wins and a lower cost base in the second half of the year.
Tangiers Petroleum, up 14%. The oil and gas explorer has seen its shares jump after it said that drilling had started at the TAO-1 exploration well off the Moroccan Atlantic coast. It holds a 25% participating interest in the Tarfaya Offshore Block, which is operated by Galp Energia with a 50% interest. The remaining 25% interest is held by Morocco'sNational Office of Hydrocarbons and Mines. The operator is scheduled to spud the high impact TAO-1 exploration well in mid- to late-June, targeting best estimate net resource potential of 190 million barrels of oil, and gross 758 million barrels of oil.
Crawshaw Group, up 12%. The meat retailer said like-for-like sales are up more than 13% in the year-to-date, a particularly strong performance given that like-for-like sales were up 8% in May and June last year. The company's financial year ends at the end of January. It said the strong performance is widely spread across its store portfolio and its reduced-cost new store fit out has worked well.
AIM ALL-SHARE - LOSERS
Dart Group, off 25%. The leisure airline and package holidays company has seen its shares nosedive after the company posted higher profits for its last financial year but warned that profits for the current financial year will miss market expectations. Dart posted pretax profit of GBP42.1 million for the year to end-March, up 4.0% on the GBP40.5 million reported a year earlier, boosted by a 29% increase in revenues to GBP1.12 billion from GBP869.2 million the prior year. However, it said that in light of its summer 2014 forward bookings, it now expects current-year operating profit to be lower than previous market expectations.
Tyratech, down 20%. The biotechnology company has posted a pretax loss of USD4.9 million in 2013, widened from a loss of USD2.9 million in 2012, as revenues declined to USD1.4 million, from USD3.6 million. In 2012, the company received a one-off payment after it established a joint venture with AMVAC Chemical Corp, and switched pesticide products it had previously sold to the venture. The company said it plans to have launched ten new products by the end of 2014, which it believes will boost revenues.
The Hotel Corporation, down 14%. The investment company which owns owns 49.9% of Puma Hotels said that the owner of Puma's debt had agreed to postpone repayment of the debt until the end of September, in a further sign that the business is suffering financial difficulty. The Hotel Corporation said LSREF III Wight Ltd, the company which bought Puma's senior outstanding debt, has agreed to postpone the repayment of the debt until the end of September, subject to certain conditions. Puma extended its GBP323.0 million senior debt facility with Irish Bank Resolution Corp in Special Liquidation last July, with new terms agreed until May 14, 2014. However, Lone Star Funds then bought Puma's banking facilities earlier this month.
LED International Holdings, down 11%. The company said it is weighing up its options regarding the funds it is due from its March and December 2013 financing arrangements, as it is yet to receive the expected cash, meaning it has now been pushed to consider alternative funding. It warned that it will have to take action to satisfy its creditors if the funding doesn't emerge within six to eight weeks, which may result in shareholders' value being "severely reduced or becoming nil". LED also said that it will apply for another extension for the GBP2.0 million it needs to contribute to its leasing finance company, Green Pearl Leasing (China) Company Ltd. LED cautioned that the deadline extension request, which will be made to the Shanghai Municipal Commission of Commerce, may or may not be granted.