FTSE 100 watch: Corporate updates and deal activity prop up Footsie

on Apr 29, 2014
Updated: Apr 9, 2020

iNVEZZ.com, Tuesday, April 29: Britain’s blue-chip index has gained ground for a second day, buoyed by positive corporate updates and merger and acquisition news.

Shares in Dublin-based Shire Plc (LON:SHP) have jumped today after media reports suggested that the biopharma company would receive a takeover bid amid a flurry of deal activity in the pharma sector.
**Footsie finds support in upbeat earnings**
As of 12:20 BST, the FTSE 100 had added 46.50 points to be 0.69 percent up at 6,746.66. The UK’s benchmark index has found support in corporate earnings from companies such as hospitality group Whitbread (LON:WTB) and wealth manager St James’s Place (LON:STJ).

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Whitbread’s share price has climbed 0.74 percent to 4,091.00p so far today with the Costa Coffee owner reporting that its total revenue had surged 13 percent to £2.29 billion in the fiscal year to 27 February 2014. (Whitbread share price: Company reports another year of double digit growth)

Shares in St James’s Place have also advanced after the wealth manager posted a quarterly increase in net inflows of funds under management. (St James’s Place share price rises on upbeat Q1 update) As of 12:22 BST, St James’s share price had added 1.24 percent to 773.00p after having gained 2.42 percent earlier in the session.

James Butterfill, global equity strategist at Coutts, told Reuters that investors were “waiting to see the start of some positive earnings momentum, which has been missing in recent years”.
“Any sign of a positive momentum is likely to support share prices,” Butterfill added.
On the macroeconomics front, the UK Office for National Statistics today reported that the UK gross domestic product had increased by 0.8 percent in the first quarter, following a 0.7 percent growth in the last quarter of 2013.

**Shire jumps on takeover speculation**

The standout Footsie riser today has been Shire, whose shares have soared after Reuters reported that that Allergan Inc (NYSE:AGN) was preparing a takeover approach.
The Financial Times quoted analysts at Barclays as saying that Shire was “palatable to many large-cap pharmaceutical companies” looking for a “relatively simple means of expanding scale in the industry” on account of the company’s 100 percent free float and niche franchises.
“With its Irish domicile, Shire offers would-be acquirers the prospect of substantial tax savings along with potential cost synergies,” the analysts added. Shire’s share price currently stands 5.11 percent higher at 3,456.00p.
BG Group (LON:BG) has been another top FTSE 100 riser due to takeover and break-up hopes after yesterday it announced the resignation of its chief executive and warned on full-year production. BG’s share price has climbed 3.05 percent to 1,181.00p.
**The FTSE 100 was 0.83 percent up at 6,755.61 points as of 13:19 BST on April 29, 2014.**


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