UK small caps rise 0.1 percent in morning trade, in line with theblue chips but underperforming the mid-caps, up 0.2 percent.
Innovation Group gains 1.9 percent to 26.25 pence after signing astrategic agreement with insurer AXA France.
"Very pleasing news from Innovation Group... This transaction is earningsneutral for the remainder of the current financial year (and) is expected to besignificantly earnings enhancing from 2014," analysts at Panmure Gordon say in anote, raising their target price on the stock to 38 pence from 36 pence andreiterating a "buy" rating on the stock.
"The deal shows the competitive strength of Innovation Insurer"
Picton Property gains 1.2 percent after reporting net asset valuehad fallen by 3 percent over the fourth quarter, with investors instead focusingon a maintenance of an attractive dividend.
"Picton's covered, above sector average dividend yield (circa 7.0 percentversus 6.3 percent sector average) is attractive, but we continue to seedownside risk to net asset value, driven by Rest of UK offices as secondaryretail yields continue to soften," Liberum says in a note maintaining a "hold"rating on the stock.
Reuters messaging rm://alistair.smout.thomsonreuters.com@reuters.net