LONDON (Alliance News) - UK shares were mostly higher Wednesday midday, while Wall Street was called for a slightly negative open, with London-listed SABMiller racing to the top of the FTSE 100 after saying that rival brewer Anheuser-Busch InBev intends to make a proposal to acquire it.
Belgium-based Anheuser-Busch InBev, which has around 200 brands in its portfolio, including Budweiser, Corona and Stella Artois, also confirmed it has made an approach.
Shares in the SABMiller were up 20% after the announcement. Last year, Dutch brewer Heineken rejected a takeover approach from SABMiller, leading to speculation that the Anglo-South African company's failure to boost its size may make it a target for AB InBev, the world's largest brewer, with SABMiller the second largest.
The FTSE 100 index was up 0.8% at 6,187.42, the FTSE 250 was up 0.3% at 17,006.97 and the AIM All-Share was flat at 736.39.
Elsewhere on the London Stock Exchange, Reckitt Benckiser shares were up 2.6%, after being upgraded from Exane BNP to Outperform from Underperform.
Glencore was giving back the gains seen at the open, after it announced it has raised USD2.50 billion from placing new shares with institutional investors and the company's own senior management.
The multi-commodity miner and trader had late Tuesday announced its intention to raise USD2.50 billion, or USD1.60 billion through the placing of 1.31 billion shares. On Wednesday, Glencore confirmed the price per share was 125.0p. At midday, the stock traded down 0.4% at 127.60p, having reached a peak of 134.00p in early trade.
Leading the blue-chip fallers was Anglo-South African paper and packaging company Mondi, down 3.7%, after being cut to Sell from Neutral by Goldman Sachs.
Inmarsat was down 1.9% after Berenberg downgraded it to Sell from Hold. The bank said the satellite communications company appears to be facing considerable competition and regulatory obstacles which its current share price does not reflect.
In the FTSE 250, Entertainment One was the top gainer after Marwyn Value Investors said it has struck a deal with Canada Pension Plan Investment Board to sell its remaining stake in the media company. Marwyn will sell its 17.9% stake in Entertainment One for GBP142.4 million via the Marwyn Value Investors LP fund, in a disposal that will raise GBP103.4 million for the investor. The 52.9 million shares were sold at 269.00 pence per share.
Entertainment One shares were up 6.1% at 285.59 pence following the news, while Marwyn Value Investors was up 3.0% at 220.45p.
On AIM, Alkane Energy was up 40%. Balfour Beatty Infrastructure Partners, a fund in which Balfour Beatty invests, said it has agreed a deal to acquire Alkane in a deal valuing the energy company at GBP61.4 million.
Balfour Beatty Infrastructure Partners, a mid-market infrastructure investment firm which operates independently of Balfour Beatty, said it has agreed to pay 36 pence per share for Alkane, a 44% premium to the closing price the day before the deal was revealed. Alkane, which operates mid-sized "gas to power" electricity plants, intends to recommend the deal to its shareholders.
Meanwhile, SeaEnergy was down 24%. The company, which provides strategic and technical advice and products to the oil and gas, renewable energy and other industries, said it will not meet its full-year expectations and said it expects to make an operating loss in 2015 before returning to profitability in 2016.
In the US, Wall Street was called for a slightly negative open, with the Dow 30 index and the S&P 500 both seen down 0.2% and the Nasdaq 100 down 0.1%. US stocks closed higher Tuesday, with the Dow up 1.4%, the S&P 500 up 1.3% and the Nasdaq Composite up 1.1%.
In the afternoon, the focus will be on US inflation data at 1430 BST and US Energy Information Administration crude oil stocks at 1530 BST.
Lloyds Bank said the release of the US consumer price index for August provides the final piece of key data for the rate-setting Federal Open Market Committee meeting which starts Wednesday.
"While the weakness of headline inflation is likely to be reiterated, a firming underlying trend in 'core' inflation is also likely to be reported," said Lloyds. "Headline CPI is expected to remain at 0.2% year-on-year, while the ‘core’ rate is forecast to nudge up to 1.9% from 1.8% [year-on-year]".
Also still ahead Wednesday, Bank of England Governor Mark Carney, along with other members of the Monetary Policy Committee, will be speaking at the Treasury Select Committee hearing at 1415 BST.
The pound rose sharply after data from the Office for National Statistics showed that UK wage growth hit a six-year high and the unemployment rate declined in three months to July.
In three months to July, the ILO jobless rate came in at 5.5%, compared to 5.6% in three months to June. It was expected to remain at 5.6%. Meanwhile, pay excluding bonuses bonuses increased 2.9% for the three months to July, which was the fastest since 2009. Total pay including bonuses also advanced 2.9% for the same period.
However, the number of people claiming jobseekers' allowances rose by 1,200 in August from July, while economists had expected a decline of 5,000.
Following the data, the pound rose to USD1.5406, after standing at USD1.5339 prior.
There also was an inflation report from the eurozone, which showed consumer price growth slowing to 0.1% year-on-year in August from the 0.2% seen in July, final data from Eurostat showed Wednesday. Month-on-month, consumer prices remained flat in August.
As a result, eurozone's inflation remains well below the European Central Bank's target of "below, but close to, 2% over the medium term".
Excluding energy, food, alcohol and tobacco, core inflation slowed to 0.9% year-on-year in August from 1% a month ago. Expectations were for the core rate to remain unchanged at 1%.
European major indices were higher, with the CAC 40 in Paris up 1.2% and the DAX 30 in Frankfurt up 0.5%.
Meanwhile, Asian stocks ended higher, with the Nikkei 225 index in Tokyo up 0.8%, the Hang Seng in Hong Kong up 2.4% and the Shanghai Composite up 4.9%.
By Daniel Ruiz; danielruiz@alliancenews.com
Copyright 2015 Alliance News Limited. All Rights Reserved.
8 Aug 2014 06:56
