LONDON (Alliance News) - London shares ended higher Monday on optimism over the Greek debt situation following the emergency eurozone summit, as the two parts will meet again on Thursday to search for a deal for the cash-strapped country.
Severn Trent and Carnival led the FTSE 100 gainers, Spire Healthcare Group was the best performer in the FTSE 250 and Savannah Resources was the biggest riser in the AIM All-Share index. Meanwhile, Thorntons shares soared after Italian chocolate maker Ferrero International said its subsidiary Ferholding UK has made an offer for the UK chocolate maker and retailer.
The blue-chip index ended up 1.7% at 6,825.67, the mid-cap FTSE 250 closed up 1.1% at 17,960.29, while the AIM All-Share finished up 0.2% at 769.73.
In Europe, major indices were also higher, with the CAC 40 up 4.1% and the DAX 30 up 3.9%. In the US, Wall Street was also firm when the European stock markets closed, with the DJIA, the S&P 500 and the Nasdaq Composite all up 0.9%.
Hopes of an agreement between Greece and its creditors later this week have increased after Athens submitted a revised economic reform proposal early Monday to which the Eurogroup have responded with optimism, suggesting that an end to a five-month long deadlock over releasing bailout aid to the cash-strapped country may be near.
Eurozone finance ministers held an emergency meeting in Brussels on Monday, which was seen as crucial and could be the deciding meeting for Greece's future with the euro.
The new proposal submitted by Greece is seen a 'positive step' in the path to reaching a deal with creditors and work will start immediately with the aim of reaching a final agreement later in the week, Eurogroup President Jeroen Dijsselbloem said in the press conference following the meeting.
Dijsselbloem welcomed the proposals and said they were received only Monday morning, which left little time for the institutions to go through them in detail to give an in-depth assessment. Media reports earlier on Monday said that Greek officials had submitted the wrong proposals late Sunday.
"Eurogroup has asked [the creditors] to work closely together and with Greek authorities to start immediately on going into those proposals....with a view of, if possible, reaching an agreement later this week. Using the Greek proposals as a basis for that," he said.
"Work can start immediately...if all goes well, it will be necessary the Eurogroup will have another meeting later this week," he said.
Greece faces a EUR1.6 billion payment to the International Monetary Fund on June 30, after the government decided not to make a payment due to the lender on June 5 and sought to bundle the four payments this month into a single payment. Greek government officials have suggested that the country cannot make the payment without further aid.
Head of Fixed Income at UBS Thomas Wacker said on a conference call that he does not expect a deal to be reached later today, when technical talks get underway, but he said a positive outcome will point to a potential agreement on Thursday. Wacker believes that if a deal is not reached this week, he expects at least an agreement to be found ahead of the payment of the EUR3.5 billion Greece owes to the European Central Bank, scheduled for July 19-20.
On the London Stock Exchange, Severn Trent was up 5.9% after a report in The Sunday Times that Canadian investment giant Borealis Infrastructure is considering a GBP5 billion approach for Severn Trent, two years after the FTSE 100 water company rejected an earlier takeover attempt. The newspaper, citing "sources close to the situation", said it is understood that the two sides opened talks last month, and discussions are at an early stage with no certainty of a deal.
Carnival shares ended up 3.7% after the cruise operator was upgraded to Buy from Hold by Deutsche Bank, with the bank saying it expects the second-quarter results from the cruiser operator to be above the upper end of the company's guidance. Analyst Richard Carter says he expects Carnival to demonstrate further booking and pricing recovery coupled with more operational momentum in its Carnival brand. Carnival will publish its second-quarter results on Tuesday.
Precious metals miners Randgold Resources, down 1.9% and Fresnillo, down 1.3% were amongst the handful of FTSE 100 stocks which ended lower Monday after the price of gold sunk below USD1,200 an ounce. Gold currently trades at USD1,185.70.
In the FTSE 250, Spire Healthcare Group was the biggest mid-cap gainer by some distance, up 11% at 355.00 pence. Private healthcare provider Spire said the major shareholder in South Africa-based private hospital group Mediclinic has acquired a 29.9% stake in the company for GBP432 million. The shareholder, Remgro, has acquired the stake in Spire at 360p per share.
Spire said the intention is for Mediclinic to acquire the stake in Spire from Remgro in the "near future". Mediclinic and Remgro have confirmed they have no intention to acquire the rest of Spire.
Meanwhile, Savannah Resources led the AIM All-Share index, up 95%. The company said it has established a joint venture with mining giant Rio Tinto, which will result in both companies combining their heavy mineral sands projects in Mozambique. Under the deal, Savannah's Mutamba, Dongane and Jangamo prospects, together called the Jangamo project, will be combined with Rio Tinto's Chilubane project.
Shares in Thorntons soared 43% after Italian chocolate maker Ferrero International said its subsidiary Ferholding UK has made a GBP111.9 million recommended offer for the struggling UK chocolate maker and retailer, at 145 pence per share.
Ferrero later said Ferholding now owns 38.98% of Thorntons' issued share capital, and now either owns or has received irrevocable undertakings to accept the offer in respect 39.20%. Ferrero said that the offer now constitutes a mandatory cash offer for all of Thorntons.
Also in the corporate calendar Tuesday, Telecom Plus, Hayward Tyler Group and Immunodiagnostic Systems Holdings publish full-year results. Meanwhile, Petrofac issues a trading update and Chemring releases half-year results.
In the economic calendar, French, German, and eurozone Markit manufacturing Purchasing Managers Index are due at 0800 BST, 0830 BST, 0900 BST, respectively. In the US, durable goods are due at 1330 BST, Redbook index is due at 1355 BST, while US Markit manufacturing PMI is due at 1445 BST. US new homes sales is due at 1500 BST.
By Daniel Ruiz; danielruiz@alliancenews.com
Copyright 2015 Alliance News Limited. All Rights Reserved.
17 Jun 2015 05:23
