(Alliance News) - London shares were mostly in the green at midday on Friday, led by UK homebuilders after Conservative Party leadership frontrunner Boris Johnson offered to reduce stamp duty in the event of a no-deal Brexit. The FTSE 100 index was up 23.47 points, or 0.3%, at 7,425.75 at midday. The FTSE 250 was up 114.17 points, or 0.6%, at 19,428.63, while the AIM All-Share was down 0.5% at 919.39.The Cboe UK 100 index was up 0.3% at 12,595.00. The Cboe UK 250 was 0.7% higher at 17,389.08, while the Cboe UK Small Companies down 0.6% at 11,321.06.In mainland Europe, the CAC 40 in Paris and DAX 30 in Frankfurt were up 0.3% and 0.4%, respectively, at midday."European equity markets are a little higher this morning as traders monitor the G20 summit. Trade talks between the US and China will be in focus as tensions have moved up a notch in recent months," said CMC Market's David Madden. The G20 summit in Osaka, Japan kicked off Friday with US President Donald Trump using his formal opening remarks on the digital economy to stress a demand for safe 5G networks, in a comment that builds on his recent complaints about Chinese firm Huawei. Madden continued: "The dispute has also taken on a technological dimension in relation to the US ban on Huawei products, and Beijing are keen for the Trump administration to lift the limitations. Donald Trump will discuss trade with China's Xi Jinping tomorrow, and that is likely to be the main event of the G20 as far as investors are concerned. A speedy solution to the trade stand-off is unlikely in light of how entrenched both sides have become, but the meeting might pave the way an improvement in the relationship." Back home, stockpiling gave the UK economy a lift in the first quarter of 2019 amid fears among manufacturers of a no-deal Brexit, according to the Office for National Statistics.The ONS said UK GDP increased by 1.8% in the first quarter of 2019, with growth accelerating from 1.4% in the final quarter of 2018, according to a final estimate by the ONS. The reading was unrevised from the previous estimate and matched consensus estimates supplied by FXStreet.On a quarterly basis, the UK economy increased by 0.5% in the first quarter, up from 0.2% in the fourth quarter of 2018. The first quarter reading was unrevised from the previous estimate and again in line with market expectations.The ONS noted that stockbuilding for Brexit added 0.7% to first-quarter growth.Sterling was quoted at USD1.2672 midday Friday, broadly flat compared to USD1.2674 at the London equities close on Thursday.On the continent, the annual inflation rate in the eurozone is expected to be stable at 1.2% in June, unchanged from the previous month and in line with forecasts, according to preliminary estimate of the harmonised consumer price index published by Eurostat.Eurozone inflation remained at its lowest since April last year.The euro was quoted at USD1.1387, higher than USD1.1365 at the European equities close on Thursday.In London, housebuilders surged to the top of the FTSE 100. "House builders are higher this morning after Boris Johnson said he would implement an emergency budget in the case of a no-deal Brexit, and that would include a reduction in stamp duty," explained CMC's Madden. He continued: "The house builders have cooled in terms of share price movement in the past year or two as there is a belief that the boom times are over for now, and the announcement from Mr Johnson prompted some buying."Berkeley had added 2.7% by midday Friday, Persimmon 2.3%, Taylor Wimpey 2.1% and Barratt Developments 1.6%.Luxury fashion designer Burberry and supermarket J Sainsbury were top gainers as well, adding 3.6% and 2.3% respectively, after analysts at US investment bank Goldman Sachs upgraded both stocks to Neutral from Sell.At the other end of the blue-chip index, BT Group was among the worst performers, shedding 1.0%, after Ofcom confirmed its new rules for business networks.The new rules will give broadband and mobile networks providers a greater access to Openreach's infrastructure. Openreach is wholly owned by BT Group but has its own board to ensure some independence.Last year, Ofcom required Openreach - which maintains the UK's main broadband network - to let rival companies use its telegraph poles and underground "ducts" to lay their own fibre networks.Until now, this rule has been available to companies focusing on residential and small-business customers. Friday's final decision will extend the to firms serving large businesses, as well as companies laying high-speed lines that support mobile and broadband networks.In the mid-cap FTSE 250, Merlin Entertainments gained 14% after it agreed to a GBP4.77 billion takeover offer from a group comprising the investment vehicle of Lego's founding family, US private equity firm Blackstone and a Canadian pension fund. Including Merlin's debt, the offer gives the company an enterprise value of GBP5.91 billion. The deal values Merlin shares at 455p each in cash, representing a 15% premium compared to the attraction operator's closing price of 395p on Thursday. Merlin was trading at 450.15p at midday.The bid is from Berkeley Bidco, a newly-formed company owned by Kirkbi, Blackstone Core Equity Partners and the Canada Pension Plan Investment Board. Kirkbi and Blackstone jointly controlled Merlin in the eight years prior to its 2013 float in London. Head of Consumer at Cavendish, Jonathan Buxton, said: "The acquisition of Merlin by Kirkbi looks like a smart strategic move to bring Merlin fully within its control and gives further opportunities to provide consumer experiences around its core LEGO brand, offsetting the loss of legacy retailers such as Toys 'R' Us."At the other end of the midcap index, Paypoint was down 4.8% after saying its contract with Centrica-owned British Gas will come to an end in December.The pair were unable to agree renewal terms to their multi-year contract. PayPoint said the break down in negotiations will take GBP1.4 million off net revenue in the current year, financial 2020. For financial 2021, PayPoint guided for a GBP3.5 million reduction in revenue."Plans are underway to mitigate this, in part, through the positive revenue trends elsewhere in the Bill Payment business, including the robust performance of MultiPay, our omni-channel payments platform. The board remains confident that there will still be a progression in profit before tax before exceptional items for the year ending March 2020," PayPoint added. Elsewhere in the London Main Market, Costain was the worst performer, losing 39%, after the infrastructure construction firm said it has recently seen a number of delays to the timing of start dates for new contracts.As a result, Costain said its revenue for financial 2019 will be lower than previously expected, with underlying operating profit guided for between GBP38.0 million and GBP42.0 million. In financial 2018, the company's underlying operating profit was GBP52.5 million.Costain said its trading in the first half, comprising the six months to June 30, were in line with expectations. "Despite delays to the timing of certain contract start dates and new awards, our markets are strong, as evidenced by the breadth of our new contract awards in the first half," Chief Executive Alex Vaughan added. Airtel Africa said it was "delighted" with the response to its initial public offering in London. Airtel said the offer was oversubscribed with strong interest from a variety of global investors across the UK, US, Africa, Europe, Middle East and Asia. Airtel set its offer price at 80 pence per share. Based on this, the company has a market capitalisation of GBP3.1 billion on admission. This would place the company safely in London's mid-cap FTSE 250 index. The offer comprises 744.0 million share news, equating to a total offer size of GBP595 million. Conditional dealings in Airtel started on Friday, with unconditional dealings expected on Wednesday next week. The stock was quoted at 69.8p midday Friday, down 13% from the IPO price.Ahead of the New York open, the Dow Jones is pointed up 0.3%, the S&P 500 up 0.2% and the Nasdaq up 0.1%.In the US economic calendar, personal consumption expenditure is at 1330 BST - the core reading of this is the Federal Reserve's preferred gauge of inflation. The Chicago purchasing managers index is at 1445 BST and the Michigan consumer sentiment index at 1500 BST.
12 Sep 2016 15:05
