LONDON MARKET MIDDAY: Hospitality stocks fall; Darktrace plots IPO

(Alliance News) - Stock prices in London were continuing to fall at midday on Monday, shrugging ...

Alliance News 12 April, 2021 | 12:26PM
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(Alliance News) - Stock prices in London were continuing to fall at midday on Monday, shrugging off optimism over the latest phase of the UK government's roadmap out of lockdown, while the IPO market remains in good health.

The FTSE 100 index was down 21.75 points, or 0.4%, at 6,894.00. The mid-cap FTSE 250 was down 50.50 points, or 0.4%, at 22,200.76. The AIM All-Share index was 0.4% lower at 1,231.13.

The Cboe UK 100 index was down 0.3% at 686.80. The Cboe 250 was down 0.2% at 19,814.30. The Cboe Small Companies was down 0.2% at 14,272.75.

In mainland Europe, the CAC 40 index in Paris was up 0.1% and the DAX 30 in Frankfurt was flat.

IG Group's Josh Mahony said: "UK markets appear to be showing signs of 'sell the fact' move today, with high-street names weakening on reopening day. The reopening of non-essential stores, pubs, gyms, and hairdressers provide hope that the worst is now behind us. Certainly, Boris Johnson will be desperate to ensure that there are no more lockdowns from here on in.

"Certainly, with the UK now having over 70% of the population protected through vaccination or having caught and recovered from Covid, the basis is there for the UK to finally enter a new pathway towards normality."

Pub chains JD Wetherspoon, Michells & Butlers and Marston's were down 0.4%, 1.7% and 1.5%, respectively.

UK Prime Minister Boris Johnson urged the nation to "behave responsibly" as the latest stage of lockdown easing comes into effect.

From Monday, non-essential retail stores, hairdressers, pub gardens and restaurants with outdoor dining are among the businesses that can now reopen in England.

Covid-19 infections, hospitalisations and deaths have all fallen thanks to the lockdown and a mass vaccination rollout that has given at least one dose to a majority of the UK adult population.

In the FTSE 100, Lloyds Banking was up 0.5% after Deutsche Bank upgraded the high street lender to Buy from Hold.

Imperial Brands was up 0.4%. The tobacco company said its new chief financial officer, Lukas Paravicini, will join the board on May 1.

Imperial Brands said Paravicini, currently CFO of agricultural commodities merchant ED&F Man Holdings Ltd, will be appointed CFO on May 19, a day after the company intends to publish its interim results.

Imperial Brands said back in February that Paravicini's start date would be on August 5. Paravicini will succeed Oliver Tant, who was originally due to step down from the role in August but will now depart at the end of June following a handover process.

At the other end of the large caps, Flutter Entertainment was down 1.5%. The gambling firm's US sports betting brand FanDuel faces having its ads taken off the air by FoxSports, the US's second-biggest sports television network, amid a dispute over the price for Fox's option to buy a stake in FanDuel, the Sunday Telegraph reported.

Rupert Murdoch's Fox is set to impose an advertising blackout on FanDuel amid the legal row, according to the newspaper. Flutter last week had said it will "vigorously" defend itself against Fox.

In M&A news, water & waste management firm Veolia Environnement said it has reached an agreement on its long-sought merger with Paris-based utility peer Suez. Veolia shares were up 8.6% in Paris, while Suez was up 7.5%.

In early February, Veolia offered EUR7.9 billion for the 70.1% of Suez it didn't already own, taking an aggressive stance in its long-running takeover bid. The move came after Veolia had bought 29.9% of Suez in October last year.

However, at the end of March, Suez demanded a new offer, asking Veolia for EUR20 per share. On Monday, Veolia said the companies have agreed on a price of EUR20.50 per Suez share, up 14% from the original offer.

The merger is expected to be completed on May 14. The combined entity will have a market capitalisation in excess of EUR26 billion.

London-listed utilities were higher in a read-across, with Severn Trent, United Utilities and Pennon Group up 1.1%, 0.8% and 1.3% respectively.

Elsewhere, Darktrace said it is considering an initial public offering on the Main Market of the London Stock Exchange, coming hot on the heels of Deliveroo's big IPO and string of smaller floats since the year began.

The UK tech startup, founded in 2013, provides cybersecurity services to businesses using artificial intelligence. The company believes it can achieve a valuation of around GBP3 billion, Sky News reported earlier this month.

Meanwhile, pension provider PensionBee Group priced its own Main Market IPO, giving a market capitalisation of between GBP346 million and GBP384 million, and Semper Fortis Esports said it plan to float on the Aquis Stock Exchange in London.

The dollar was lower against major counterparts at midday in London. The pound was quoted at USD1.3745, up from USD1.3723 at the London equities close on Friday.

"The success of this next stage of relaxations could spur the pound back to life after it slipped back against most of its peers over the past week or two," commented analysts at OFX.

The euro was priced at USD1.1905, up from USD1.1886 late Friday. Against the yen, the dollar was changing hands at JPY109.33, lower from JPY109.69.

Brent oil was quoted at USD63.28 a barrel Monday at midday, up from USD63.13 late Friday. Gold was trading at USD1,741.37 an ounce, lower against USD1,743.30.

"Oil and the euro are finally getting some good news from Europe regarding the vaccination programs. Germany had a decent week bringing it up to more than 12 million jabs, up by a quarter on the week and more than 700,000 in just one day last Thursday," said Axi's Stephen Innes.

US stock market futures were pointed lower in the wake of the latest outlook from Federal Reserve Chair Jerome Powell.

The Dow Jones Industrial Average was called down 0.1%, S&P 500 down 0.2% and Nasdaq Composite down 0.3%.

Powell said the US economy is at an "inflection point" with stronger growth and hiring ahead thanks to rising vaccinations and policy support. However, in an interview with CBS's 60 Minutes which aired Sunday, he also again insisted that the Covid-19 pandemic continued to present a risk and could impede the recovery.

Microsoft shares were 0.2% lower in pre-market trade. The software company is in advanced discussions to buy the US's Nuance Communications, which specialises in artificial intelligence, for USD16 billion, according to media reports Sunday.

The deal could be announced on Monday, CNBC reported, citing a source close to the situation. According to the source, Microsoft made an initial offer in December and is willing to pay USD56 per share for Nuance, which represents a premium of 23% compared to the group's closing stock price on Friday.

If the deal goes through, this would be the second-most important acquisition for Microsoft after its USD27 billion purchase of LinkedIn in 2016.

By Arvind Bhunjun;

Copyright 2021 Alliance News Limited. All Rights Reserved.

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Securities Mentioned in Article

Security Name Price Change (%) Morningstar
Marston's PLC 100.00 GBX 3.20 -
Wetherspoon (J D) PLC 1,352.00 GBX 1.88 -
Ryanair Holdings PLC 16.85 EUR 1.44
Imperial Brands PLC 1,590.00 GBX 0.63
Lloyds Banking Group PLC 48.25 GBX 2.65
Mitchells & Butlers PLC 315.60 GBX 2.14 -
United Utilities Group PLC 989.00 GBX 1.17
Severn Trent PLC 2,510.00 GBX 1.33 -
Pennon Group PLC 1,045.50 GBX 1.21 -
Flutter Entertainment PLC 12,695.00 GBX 0.59 -
Flutter Entertainment PLC 147.50 EUR 0.85 -
Microsoft Corp 248.15 USD 2.11
Veolia Environnement SA 26.10 EUR 1.87

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