LONDON MARKET OPEN: Stocks Higher As Investors Cheer Ibstock Unit Sale

LONDON (Alliance News) - Stock prices opened broadly higher on Friday rebounding slightly from ...

Alliance News 23 November, 2018 | 8:47AM
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LONDON (Alliance News) - Stock prices opened broadly higher on Friday rebounding slightly from sharp losses on Thursday, while Ibstock led London midcaps after selling its US business.

The pound was flat heading into the special EU summit on Sunday about Brexit.

The FTSE 100 was up 0.3% or 20.76 points, at 6,963.71 in early trade. The FTSE 250 was up 0.2%, or 30.60 points, at 18,561.19 and the AIM All-Share was down 0.1% at 924.31.

The Cboe UK 100 was down 0.1% at 11,808.40, the Cboe UK 250 flat at 16,690.35 with the Cboe UK Small Companies flat at 11,401.61.

On the London Stock Exchange, Fresnillo was the worst blue-chip performer, down 2.9%, adding to losses on Thursday after being hit by a broker downgrade.

The stock ended down 12% Thursday after Morgan Stanley downgraded the gold miner to Underweight from Equal Weight saying its prospects could be severely hurt should proposed mining legislation in Mexico - restricting mining access in the country - come to fruition.

Miners generally were weighing on the FTSE 100 index amid weaker metal prices, with Rio Tinto down 1.0%, Anglo American down 0.9%, Glencore down 0.7%, and Antofagasta down 0.6%.

Gold was lower quoted at USD1,222.57 from USD1,227.52 late Thursday.

Pearson was down 1.0% after Shore Capital downgraded the education publisher to Hold from Buy.

In the FTSE 250, Ibstock was the best performer, up 8.3% after the brick maker said it remains on track to deliver its annual earnings target and sold its US brick manufacturing business, Glen-Gery.

The unit was disposed to building materials firm Brickworks for an enterprise value of USD110 million, on a debt and cash free basis.

As part of the transaction, Brickworks will assume certain liabilities, including an associated pension liability. Ibstock expects to secure about USD95 million from the sale of Glen-Gery, with the transaction closing in the "coming days".

Ibstock said it remains on track to deliver adjusted earnings before interest, taxes, depreciation, and amortization between GBP121 million and GBP125 million for the year to the end of December. This includes a full-year contribution from Glen-Gery of GBP11 million. In 2017, Ibstock reported adjusted Ebitda of GBP119.6 million.

Hastings Group was up 4.5% after Barclays raised the insurer to Overweight from Equal Weight.

CYBG was up 2.4% after Goldman Sachs resumed coverage on the lender with a Neutral rating.

In China, the Shanghai Composite closed down 2.5%, while the Hang Seng index in Hong Kong closed down 0.5%. The Tokyo market is closed for the Labor Thanksgiving Day holiday in Japan.

Asian stocks ended lower on worries about slowing growth and uncertainty surrounding the outcome of US-China trade talks.

US President Donald Trump said on Thursday he was hopeful of making a deal with China when he meets his Chinese counterpart Xi Jinping at the G20 in Argentina next week.

"China wants to make a deal very badly. If we can make a deal, we will," Trump said.

The pound was flat quoted at USD1.2858 against USD1.2855 at the London equities close Thursday.

UK Prime Minister Theresa May has been warned she faces a battle to reach a final agreement on Brexit as she prepares for a special summit of EU leaders this weekend.

Ahead of Sunday's gathering, Spanish premier Pedro Sanchez demanded last-minute changes to the deal despite May's efforts to win him round.

The UK prime minister will head to Brussels on Saturday for eve-of-summit talks with European Commission President Jean-Claude Juncker knowing that she also faces an uphill task in Westminster to persuade her own MPs to back her deal.

May declared that final agreement on Brexit is "within our grasp" following a breakthrough on future relations between the UK and EU on Thursday. The prime minister added she will not support another referendum on Brexit even if parliament votes down her agreement for Britain to withdraw from the EU.

"With Sunday's EU-UK Brexit Summit back on after yesterday's progress, any soundbites on remaining resolutions, be it actual progress or hopes thereof, as well as threats or actual spanners in the works, could keep the pound and thus the FTSE and its components on edge into the weekend," said Michael van Dulken, head of research at Accendo Markets.

The euro was firm against the dollar at USD1.1411 against USD1.1400 late Thursday

Germany's economy shrunk for the firs time since early 2015 and at the fastest pace in nearly six years, mainly due to weak exports and car sales, latest figures from the Federal Statistical Office confirmed.

On a calendar-adjusted basis, the GDP rose 1.1% year-on-year following a 2% growth in the previous quarter. The year-on-year gain was the smallest since the third quarter of 2013, when the economy grew only 0.7%.

The economic calendar on Friday has manufacturing and services PMI figures from France, Germany, the eurozone and US at 0815 GMT, 0830 GMT, 0900 GMT and 1445 GMT respectively.

Financial markets in the US will resume trading on Friday for a half day after being closed on Thursday for the Thanksgiving Day holiday.

By Arvind Bhunjun; arvindbhunjun@alliancenews.com

Copyright 2018 Alliance News Limited. All Rights Reserved.

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Securities Mentioned in Article
Security Name Price Change (%) Morningstar
Rating
Hastings Group Holdings PLC 179.40 GBX 1.53 -
CYBG PLC 190.30 GBX 4.62
Ibstock PLC 211.80 GBX 2.32 -
Antofagasta PLC 786.60 GBX -1.18
Glencore PLC 293.00 GBX 0.02
Fresnillo PLC 837.80 GBX 2.30 -
Pearson PLC 935.60 GBX -0.47
Rio Tinto PLC 3,719.50 GBX -1.14
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