LONDON (Alliance News) - UK stocks got off to mixed start Monday morning, with broker rating changes largely responsible for the main fallers in the FTSE 100, while shares in Old Mutual shot higher after it said "all options" are being considered in its strategic review.
Old Mutual was the best performer in the blue-chip index, up 8.6% in early trade. The Anglo-South African financial services group said that "all options" are being considered for its strategic review but no decision has yet been made, in response to a report from Sky News that the company is planning a break up of its operations.
Sky News reported over the weekend that the Anglo-South African financial services group is planning to split into four standalone units. This would comprise its stake in South African lender Nedbank, its UK-focused wealth management unit, its South Africa-based emerging markets operation, and its institutional asset management business.
Old Mutual noted the press speculation Monday, and reiterated that when its new Chief Executive Bruce Hemphill joined at the beginning of November, it had said it would be conducting a strategic review. It will provide an update on this review with its 2015 results, which it will release Friday.
Just after the open, the FTSE 100 was down 0.3%, or 17.55 points, at 6,181.88.
However, the mid-cap FTSE 250 was up 0.1% at 16,939.99 and the AIM All-Share was up 0.3% at 704.72. European stocks got off to a similarly underwhelming start, with the CAC 40 in Paris flat and the DAX 30 in Frankfurt down 0.2%.
In Asia Monday, the Japanese Nikkei 225 index closed down 0.6%, the Shanghai Composite ended up 0.8% and the Hang Seng in Hong Kong down 0.1%.
Elsewhere in the FTSE 100, Randgold Resources was the biggest faller, down 2.7%, after Morgan Stanley cut its rating on the gold miner to Equal-Weight from Overweight, according to traders. InterContinental Hotels Group shares also were suffering because of a downgrade, by Citigroup to Sell from Neutral. IHG traded down 2.3%.
In the FTSE 250, Howden Joinery was amongst the biggest fallers, down 3.5%, after Jefferies cut the kitchen and joinery products supplier to Hold from Buy.
At the other end of the index, midcap oil-related stocks were rallying as the oil prices hit their highest levels of the year so far. Before the London stock market open, Brent touched a high of USD39.47 a barrel, its most expensive price since mid-December. Just after the open, Brent crude traded at USD39.05 a barrel.
Tullow Oil was the biggest gainer in the FTSE 250, up 8.9%, while Ophir Energy was up 3.4% and Petrofac was up 1.6%.
UK retail and business bank Metro Bank's shares rose Monday, its first day of trading on the London Stock Exchange's Main Market.
Just after the market open, Metro Bank shares were at 2,170.00 pence, 8.5% above the high-street bank's initial public offering price of 2,000.00p.
Metro Bank had cut the size of its planned initial offering back in February following a sell-off of shares in the wider banking sector at the beginning of the year. It confirmed on Friday an IPO price of 2,000.00p down from its originally planned 2,400.00p, reducing the amount it would raise to GBP400 million from GBP500 million.
In the AIM-All Share, fastjet shares were down 42%, after it issued a profit warning for 2016 following "prolonged" challenges in the African aviation industry.
The African low-cost airline said challenging market conditions affecting much of the aviation industry on the continent have been "a lot more prolonged" than it had originally forecast, and therefore, results for 2016 will be "materially below" market expectations.
fastjet also no longer expects to be cashflow positive for the year, but said it has sufficient funds to meet its operational requirements, with over USD20 million of cash available at the end of February.
fastjet may consider raising further funds during the year to provide additional headroom and to ensure it has the necessary resources to fund future growth as market conditions improve, it said.
Still ahead in the economic calendar for Monday, the Sentix investor confidence index for the eurozone is at 0930 GMT. In the afternoon is US labour market conditions at 1500 GMT, with US consumer credit data at 2000 GMT.
The focus will also be on Federal Reserve Vice Chairman Stanley Fischer, who will be making a speech in Washington at 1330 GMT.
By Neil Thakrar; neilthakrar@alliancenews.com; @NeilThakrar1
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