LONDON MARKET MIDDAY: Stocks Higher As Shire And Whitbread Gain

LONDON (Alliance News) - Stocks in London were higher at midday on Friday with Shire and Whitbread performing well among FTSE 100 constituents, while in the FTSE 250, Investec was benefiting from its plan to demerge its asset management businesses. The FTSE 100 index was 0.4%, or 27.10 points, at 7,308.72 at midday. The FTSE 250 was up 0.5%, or 97.90 points to 20,341.44, while the AIM All-Share index was flat at 1,097.10.The Cboe UK 100 index was up 0.3%, or 40.75 points, at 12,372.97. The Cboe UK 250 was up 0.5%, or 94.09 points to 18,487.59, and the Cboe UK Small Companies was down 0.1% at 12,190.36."European stocks are slightly higher this morning as traders are cautiously optimistic about the state of global trade. The US and China are still locked in a trade spat, and both sides are content to hold their positions. Traders are viewing no new negative news as a positive for stocks," said CMC Markets analyst David Madden. On the London Stock Exchange, Shire was the best performer in the FTSE 100, up 2.4% at 4,502.50 pence after Takeda Pharmaceutical said it had received regulatory clearance in China for its GBP46 billion acquisition of the Irish drugmaker. The Japanese firm received unconditional approval for the deal announced in May from the State Administration for Market Regulation in China in what it termed "another key step" in the transaction process. Chinese approval follows progress with other global regulators. In July, the deal received the green light from the US Federal Trade Commission. It also has received unconditional approval from the Brazilian Administrative Council for Economic Defense. Under the deal, Takeda will pay USD30.33 in cash and 0.839 of a new Takeda share for each Shire share. This values the deal at around 4,990 pence per Shire share based on current prices and exchange rates.Another blue-chip winner was Whitbread, which was up 1.5%. The Costa Coffee shop and Premier Inn hotel chain owner was raised to Overweight from Neutral. Last month, Whitbread agreed to sell Costa to Coca-Cola for GBP3.8 billion and return the vast majority of that to shareholders.In the FTSE 250, Investec was the best performer, up 8.4%. The Anglo-South African financial services firm said its interim profit is expected to be ahead of last year, as it also announced plans to demerge and publicly list its Asset Management unit. Following the conclusion of a strategic review, the company said that there are "compelling" linkages between its Specialist Banking and Wealth & Investment business. However, there are "limited synergies" between both of these divisions and Investec Asset Management. Therefore, the board has decided to demerge and publicly list the asset management unit. Separately, Investec said although its first half saw "macro challenges" in both South Africa and the UK, operating profit for the period is expected to be above last year.At the other end of the FTSE 250, JD Wetherspoon was down 0.9%. The pub chain said taxes, labour, and interest costs are expected to be higher year-on-year, despite reporting growth in profit. For the 52 weeks to July 29, Wetherspoons recorded pretax profit of GBP107.2 million, up 4.3% year-on-year, with pretax profit rising 6.2% excluding an extra week in its prior financial year.Revenue was GBP1.69 billion compared to GBP1.66 billion a year before. Like-for-like sales, adjusted for 52 weeks, increased by 5.0% versus 4.0% the year prior. Looking ahead, the company estimates it will be required to achieve like-for-like sales growth of about 4.0% in its new financial year to match Friday's profit figure. Same store sales in the six weeks to September 9 were up 5.5%, a "reasonable" start to the year.Wetherspoon's opened six pubs during its year, with 18 sold or closed, resulting in a trading estate of 883 pubs at end of its 2018 financial year.The pound was quoted at USD1.3125 compared to USD1.3101 at the London equities close on Thursday. Bank of England Governor Mark Carney warned UK ministers that house prices could crash by more than a third in the event of a chaotic no-deal Brexit. Carney briefed Prime Minister Theresa May and senior ministers on the bank's planning for a "cliff-edge" break with the EU at a special Cabinet meeting on Thursday to review the government's no-deal preparations. It is understood he warned house prices could fall by up to 35% over three years in a worst-case scenario, as sterling plummeted and the Bank was forced to push up interest rates. According to reports, he compared the fall-out from such a disorderly departure to the 2008 global financial crash. Ministers were said to have listened in silence as he and Chancellor Philip Hammond spelled out the grim consequences for the economy. His bleak prognosis came as France said it could halt flights and Eurostar trains from the UK if there was no agreement when the UK leaves the EU in March 2019."Mark Carney is risking the ire of hard Brexiteers once more this morning as the governor for the Bank of England has warned that a no-deal Brexit could lead to economic chaos which would see house price crash by as much as a third," said XTB analyst David Cheetham. "On the flip side, Carney also noted that PM May's much maligned Chequers exit plan, should it manage to be agreed upon, would see the economy perform better than the bank's assumed outcome," Cheetham added. On Thursday, Bank of England policymakers unanimously decided to maintain their monetary policy stance unchanged after a quarter-point rate hike in August. The Monetary Policy Committee voted 9-0 to keep the key rate unchanged at 0.75%.In Paris the CAC 40 was up 0.4%, while the DAX 30 in Frankfurt was up 0.3%. The euro was quoted at USD1.1697 at midday, marginally higher against USD1.1673 European equities close Thursday. US stocks are pointed towards a slightly higher start on Friday. The Dow Jones called up 0.1%, S&P 500 flat and Nasdaq Composite up 0.2%."The US economy has been gathering positive momentum despite the risk of a trade war and today's retail sales data is expected to provide further evidence of that, with spending expected to have risen by 0.4% last month. This would continue the steady trend of rising sales over the course of the year as consumers spend the additional income that tax cuts afforded them thanks to last year's reforms," said Oanda analyst Craig Erlam.Still to come in the economics events calendar are US retail sales and import and export prices at 1330 BST.