LONDON (Alliance News) - Shares in London opened higher Wednesday, with commodity-related stocks recovering some of the ground lost on Tuesday, while London Stock Exchange Group shares were up slightly after announcing its merge with rival Deutsche Boerse and those of Hikma Pharmaceuticals were down after reporting lower profit in 2015.
The FTSE 100 index was up 0.4%, or 24.01 points, at 6,163.98.
London Stock Exchange and German rival Deutsche Boerse said they have reached an agreement to merge, having confirmed last month they were in talks.
The merger will be carried out through the creation of a new UK holding company which will acquire LSE Group via a scheme of arrangement. LSE Group shareholders will get 0.4421 of a share in the newly-combined company for each LSE share they currently own, meaning they will own 45.6% of the group, with Deutsche Boerse shareholders have 54.4%.
The pair said the combined group will maintain headquarters in London and Frankfurt, and the board will have equal representation from both companies. LSE Group Chairman Donald Brydon will be chairman of the group, with Carsten Kengeter, Deutsche Boerse's chief executive, to be CEO. LSE CEO Xavier Rolet will step down.
Shares in LSE were up 0.3%.
Hikma Pharmaceuticals was down 5.4% after reporting a fall in pretax profit in 2015, but forecast a significant rise in revenue for the year ahead, helped by its recent acquisition of Roxane Laboratories, despite lowering its guidance for the Roxane business last month.
Hikma, which will be demoted from the FTSE 100 next month, reported a pretax profit of USD318 million, down from USD362 million in 2014, as revenue slipped to USD1.44 billion from USD1.49 billion the year before. Analysts had expected Hikma to report a pretax profit of USD302.2 million on revenue of USD1.44 billion, so it beat expectations for profit and met them for revenue.
Hikma proposed a final dividend of 21 cents per share, taking its total dividend to 32 cents for the year, in line with what it paid in 2014.
Elsewhere, miners and oil stocks were taking back some of the losses from Tuesday, with Anglo American up 2.8%, having dropped 11% on Tuesday. Fellow blue-chip miner Glencore was up 1.9%, BHP Billiton up 1.5% and Rio Tinto up 1.3%. Mid-cap Vedanta Resources was up 5.6%.
BP was up 2.1%, while oil major Royal Dutch Shell 'A' shares were up 1.4%.
The FTSE 250 index was up 0.3% at 16,678.67 and the AIM All-Share was up 0.1% at 711.53. In Europe, the CAC 40 index in Paris and the DAX 30 in Frankfurt were up 0.4% and 0.5%, respectively.
Tullow Oil shares rose 3.6%. The company said it has encountered "good oil shows" across an interval of over 700 metres in the Cheptuket-1 well in Block12A in northern Kenya. The well is the first one to test the Kerio Valley Basin and was drilled by the PR Marriott Rig-46 to a final depth of 3,083 metres.
The objective of the well was to establish a working petroleum system and test a structural closure in the south-western part of the basin. The strong oil shows encountered in Cheptuket-1 indicate the presence of an active petroleum system with significant oil generation, the company said.
Investment company Allied Minds was up 4.5% after saying Allied-Bristol Life Sciences, its joint venture with US drugs company Bristol-Myers Squibb, has signed a collaboration with New York University. Allied-Bristol has launched ißeCa Therapeutics to licence proprietary compounds from the NYU School of Medicine which will target the Wnt pathway. The Wnt pathway plays a key role in the development and progression of a number of cancers.
Greggs added 2.3% after Berenberg upgraded the bakery chain to Hold from Sell.
Meanwhile, Thomas Cook was down 5.6%, the worst mid-cap performer, after Citigroup cut the travel group to Sell from Neutral.
Shares in Moneysupermarket.com were down 5.3% at 325.40p, after founder Simon Nixon has completed the sale of his entire remaining stake in the company, according to a Credit Suisse announcement.
Credit Suisse Securities placed 37.8 million shares on behalf of Nixon at 328.00p per share, raising a total of GBP124.0 million. The shares sold represent around 6.9% of the company's issued share capital. The intended sale was announced soon after the market close Tuesday and completed by early Wednesday.
The main focus this morning will be on the UK Budget presentation scheduled for 1230 GMT, while the US Federal Reserve monetary policy decision will take centre stage after the London close.
UK Chancellor of the Exchequer George Osborne is set to take aim at public services in his Budget, with spending cuts set against a splash of new spending commitments for roads, railways and housing, plus incentives to increase the amount Britons save.
Osborne is expected to make around GBP4.0 billion in further cuts to public services in the UK, with an already stated intention to trim around 50 pence from every GBP100.00 that Westminster spends by 2020, by which time Osborne has an eye on the UK government turning to a surplus.
Osborne warned at the beginning of 2016 of a "dangerous cocktail" of risks being faced by global economy, and those concerns later were compounded by an official report which indicated a GBP18.0 billion black hole in the UK's public finances. Osborne remains fixed on running a budget surplus in the UK by 2020, which will force spending cuts and tax hikes now to meet that goal.
Later in the day, the focus will turn to the US, as the Fed finishes its two-day monetary policy meeting. The Federal Open Market Committee will reveal its policy decision and economic projections at 1800 GMT, followed by a press conference held by Chair Janet Yellen at 1830 GMT.
The Fed will likely to stay on hold, but economists believe the US central bank will hint at raising its target for the Federal fund rate later in 2016, as economic conditions improve following the torrid start to the year.
Also in the economic calendar Wednesday, the UK's unemployment rate is due at 0930 GMT. In the US, the consumer price index is due at 1230 GMT. US industrial production is due at 1230 GMT, while the Energy Information Administration oil stocks data are due at 1430 GMT.
Wall Street ended mixed Tuesday, with the DJIA up 0.1%, the S&P 500 down 0.2% and the Nasdaq Composite down 0.5%.
In Asia on Wednesday, the Japanese Nikkei 225 index closed down 0.8%. In China, the Shanghai Composite ended up 0.2%, while the Hang Seng index in Hong Kong finished down 0.2%.
By Daniel Ruiz; danielruiz@alliancenews.com
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