LONDON (Alliance News) - Stock prices in London were higher early Friday as oil companies benefit from a recovery in the oil price, while optimism remains despite no agreement between the US and China. Outside the large caps, Flybe and Stobart's shares went in separate directions after news of the regional airline's takeover by the airport operator in a joint venture with Virgin. In a reversal of the normal market response to a takeover announcement, shares in the acquisition fell, while those of the acquirer rose. The FTSE 100 was up 21.09 points, or 0.3%, at 6,964.25, while the FTSE 250 was 0.2% higher at 18,471.11. The AIM All-Share was up 0.3% at 906.01.The Cboe UK 100 was up 0.8% at 11,850.08, while the Cboe UK 250 was 0.5% higher at 16,536.85 and the Cboe UK Small Companies up 4.51 points at 11,151.46.In UK corporate news, a consortium made up of Stobart Group, Virgin Atlantic, and a company owned by Cyrus Capital Partners are to buy struggling budget airline Flybe for GBP2.2 million.Stobart shares were 7.7% higher on the news, while Flybe had slumped 78%.The joint venture, Connect Air, will pay 1 pence per share to Flybe shareholders. Shares closed at 16.38p on Thursday, but fell to 3.70p early Friday. Connect Air also will buy Stobart's regional airline and aircraft leasing business Stobart Air for GBP40 million to fold in.In addition to the discounted purchase price, Connect Air will provide GBP100 million in funding to Flybe. This is composed of GBP20 million as an initial bridge loan, and then GBP80 million operational funding once the takeover is completed.In the FTSE 250, builders merchant Grafton was 2.4% higher as it reported a strong increase in revenue for 2018, growing 8.7% to GBP2.95 billion.At constant currency rates revenue rose 8.4 year-on-year, and average daily like-for-like revenue grew 4.3%.As a result, Grafton expects earnings before interest, tax, and amortisation for 2018 to be "slightly" ahead of the top end of market expectations, which sees a range of GBP185.1 million to GBP188.5 million. In 2017, adjusted Ebita was GBP160.9 million.Manufacturing revenue growth was strong at 19%, while growth in the Netherlands was another highlight at 18%. Revenue growth in the UK was 7.7% and in Ireland 8.4%.Oil and gas support services Hunting was 5.6% higher as JPMorgan raised its rating on the stock to Overweight from Neutral.Cairn Energy was 4.9% higher, and Premier Oil 3.0% higher as the price of oil crept upwards. Brent was quoted at USD62.17 a barrel Friday from USD61.33 late Thursday. In the FTSE 100, Shell 'A' shares and 'B' shares were both 1.1% higher, while BP was up 1.3%. Back in the FTSE 250, UDG Healthcare was down 6.7% after Jefferies cut its rating on the stock to Hold from Buy. Elsewhere on the London Stock Exchange retailer Debenhams was 5.5% lower, having closed down 15% Thursday, after shareholders rejected the re-elections of Chair Ian Cheshire and Chief Executive Sergio Bucher to its board.Bucher will stay in his role, but Cheshire has resigned. Over 56% of the votes cast at the AGM voted against the re-election of Cheshire and Bucher. Excluding "two major shareholders" over 99% of the votes cast were in favour of Bucher being re-elected to the board.Major shareholders include Sports Direct International with nearly 30%. AO World was 3.7% up as it said is on track to meet its long-term plans, the electrical retailer said, and expects to meet expectations for the year to March 2019.For the three months to December, AO World's revenue grew 8.2% year-on-year, and the company said customers responded well to its Black Friday offering.UK quarterly revenue growth was 4.4%, while in Europe it was 31%, stronger than in the second quarter, as anticipated, AO World said.Clothing retailer Quiz slumped 24% as it grew its revenue by 8.4% in the six weeks to January 5, with online revenue rising 34%.However, sales were below expectations over Christmas, Quiz warned, and it has revised its revenue forecasts for its year ending March 31.It now expects revenue at GBP133.0 million, below market expectations, from GBP116.4 million the year before. Gross margins are set to be around 60.5% from 62% year-on-year.Quiz's earnings before interest, tax, depreciation, and amortisation is guided at GBP8.2 million, from GBP11.5 million a year prior.US Federal Reserve Chairman Jerome Powell on Thursday predicted no recession in 2019, and said the US central bank will be patient in determining when to hike interest rates.Fed Vice Chairman Richard Clarida also said the Fed could afford to take a wait-and-see stance on interest rates if headwinds to the US economy from financial markets or global growth prove persistent.St Louis Federal Reserve Bank President James Bullard, a member of the Fed's Open Market Committee, likewise took a dovish tone, saying he will only support further hikes if inflation expectations pick up.President Donald Trump travelled Thursday to Texas for a visit to the US-Mexico border as he intensifies his push for a wall, a demand the opposition Democrats in Congress flat-out reject.The stalemate over funding the wall has resulted in a partial government shutdown that will reach day 21 on Friday, tying a record for the longest government shutdown in US history.Trump held a round-table discussion with border guards, local politicians and fellow Republicans who testified to the need for building a wall or barrier to stop illegal immigration, human trafficking and the flow of illicit drugs."It's clearly a crisis," Trump said. "A lot of the crime in our country is [committed] by people who are coming through right here."He said again Thursday he might declare a national emergency in order to circumvent Democrats in Congress who are blocking funding for a wall."I'm not prepared to do that yet, but if I have to do that, I will," he added.In the US on Thursday, Wall Street ended in the green, with the Dow Jones Industrial Average closing 0.5% higher, the S&P 500 also up 0.5%, and the Nasdaq Composite ending up 0.4%.In local political news, UK Prime Minister Theresa May has reached out to union leaders as she makes an 11th-hour attempt to reach out to her political opponents to get her Brexit deal through the Commons.Downing Street said the prime minister had "constructive" phone conversations about her Brexit deal with trade union leader Len McCluskey of Unite, a Brexit supporter and close confidant of Labour leader Jeremy Corbyn, as well as Tim Roache of the GMB.Number 10 also confirmed ministers would "consider very seriously" moves by Labour members of Parliament to safeguard workers' rights after Brexit in an attempt to win support for her deal, if the backbench amendment was selected by the Speaker.The amendment would keep EU rules on pay and conditions, health and safety issues, and environmental standards.However senior opposition figures rowed back against the overtures, saying it was too little, too late.Sterling was quoted at USD1.2742 Friday, lower compared to USD1.2775 at the close Thursday.In mainland Europe, the CAC 40 in Paris was up 0.2%, while the DAX 30 in Frankfurt was 0.1% higher.The euro was slightly higher at USD1.1528, against USD1.1520 late Thursday. The economic events calendar on Friday has UK industrial and manufacturing figures at 0930 GMT and US inflation readings at 1330 GMT. In addition, the US monthly budget statement for December is set to be released at 1900 GMT.
10 Jun 2016 08:42
