LONDON MARKET MIDDAY: Stocks reverse declines; Deliveroo prices IPO

(Alliance News) - Stock prices in London recovered opening losses by midday on Monday despite fears over rising coronavirus cases in Europe, while Deliveroo set out plans for the biggest London listing of 2021 so far.

Investors grew more concerned about Europe, where the vaccination programme has stuttered and where a rise in new cases has forced countries including France and Germany to reimpose lockdowns.

UK Prime Minister Boris Johnson Boris Johnson is expected to ask European leaders this week to dismiss any proposals to block coronavirus vaccine exports to the UK.

European Commission President Ursula von der Leyen ramped up the rhetoric this weekend, saying the EU has the power to "forbid" exports, adding: "That is the message to AstraZeneca."

The warning reflects growing frustration on the continent that the EU is not getting the supplies it expected from the Anglo-Swedish drug manufacturer.

The UK PM is expected to contact his EU counterparts ahead of virtual summit on Thursday where European leaders are due to consider the matter, The Financial Times reported.

AstraZeneca was up 2.4% after it said early Monday the US phase III trial of its AZD1222 vaccine - co-developed with the University of Oxford - demonstrated statistically significant vaccine efficacy of 79% at preventing symptomatic Covid-19 and 100% efficacy at preventing severe disease and hospitalisation.

AstraZeneca said interim safety and efficacy analysis was based on 32,449 participants accruing 141 symptomatic cases of Covid-19. The trial had a 2:1 randomisation of vaccine to placebo. Vaccine efficacy was consistent across ethnicity and age. Notably, in participants aged 65 years and over, vaccine efficacy was 80%, it added.

AstraZeneca said it will continue to analyse the data and prepare for the primary analysis to be submitted to the US Food & Drug Administration for Emergency Use Authorization in the coming weeks.

The FTSE 100 index was up 9.17 points, or 0.1%, at 6,717.88. The mid-cap FTSE 250 index was up 35.85 points, or 0.2%, at 21,456.14. The AIM All-Share index was 0.2% higher at 1,201.65.

The Cboe UK 100 index was down 0.1% at 669.32. The Cboe 250 was down 0.2% at 19,113.66, and the Cboe Small Companies down 0.5% at 13,892.44.

In mainland Europe, the CAC 40 in Paris was 0.2% lower, while the DAX 30 in Frankfurt was up 0.2%.

In the FTSE 100, Kingfisher was the still best blue-chip performer, up 3.5%. The DIY retailer hailed a strong annual performance as the pursuit of home improvement projects continued throughout the year.

For the financial year that ended January 31, revenue was up 7.2% at GBP12.34 billion from GBP11.51 billion the year before, while pretax profit multiplied to GBP756 million from GBP103 million.

Kingfisher declared a total dividend of 8.25 pence, having skipped payouts in financial 2020 due to the Covid-19 pandemic.

Looking ahead, Kingfisher said the new financial year has started positively, with first quarter like-for-like sales to March 18 up 24%, reflecting strong demand in the UK and France.

Rightmove was up 2.6% after UBS raised the property portal to Buy from Neutral and Lloyds Banking was up 2.1% after JPMorgan upgraded the UK lender to Overweight from Neutral.

At the other end of the large-caps, International Consolidated Airlines was the worst performer, down 6.1%, after Deutsche Bank downgraded the British Airways parent to Hold from Buy.

In addition, aviation services providers Rolls-Royce and Melrose Industries were down 2.5% and 2.2% respectively.

Travel stocks were lower across the board as the spat between the UK and Europe continued and fears the crucial summer holiday season will be threatened by the slow vaccine rollout on the continent.

In the FTSE 250, budget airline easyJet was down 6.0%, Anglo-German tour operator Tui was off 6.2%, and Hungarian airline Wizz Air was 3.5% lower. In addition, Irish carrier Ryanair was 5.2% lower.

AJ Bell's Russ Mould said: "Airlines and travel operators had seemingly refused to countenance the cataclysmic idea of another heavily disrupted summer and had been busily advertising to an increasingly inoculated UK population. However, the significantly slower pace of the vaccine rollout in the EU, a spike in infections in mainland Europe, and the emergence of new variants has complicated the picture.

"The risk, and one being increasingly acknowledged by government ministers, is this summer is even worse than last for the travel space as the UK keeps restrictions in place to avoid undermining its hard-won success with the vaccine."

Elsewhere, Deliveroo said it will be worth just under GBP9 billion on admission to the London Main Market, as the company edges closer to its float and continues to see increased demand for its takeaway food delivery service.

Deliveroo will price its initial public offering between GBP3.90 and GBP4.60 per share. This would imply a market capitalisation between GBP7.6 billion and GBP8.8 billion. It will be the biggest IPO of 2021 so far.

The IPO will consist of 384.6 million shares, though this does not include any over-allotment stock. At the low end of the price range, this would value the offer at GBP1.5 billion, of which GBP1 billion will be for the company from new shares.

The pound was quoted at USD1.3864 at midday on Monday, down from USD1.3874 at the London equity market close on Friday.

The euro was priced at USD1.1927, higher from USD1.1901. Against the yen, the dollar was trading at JPY108.68, down from JPY108.86.

Brent oil was quoted at USD64.40 a barrel Monday at midday, up from USD64.07 at the London equities close on Friday. Gold was trading at USD1,737.57 an ounce, down slightly from USD1,739.97.

US stock market futures were pointed mostly higher as US treasury yields were easing from recent high levels.

The Dow Jones Industrial Average was called down 0.1%, but the S&P 500 was called up 0.2% and the Nasdaq Composite up 0.8%.

The 10-year US Treasury yield stood at 1.68% on Monday around midday in London, narrowing from 1.69% at the same time on Friday. The yield had jumped above 1.77% at its high last week, reaching its widest point since January 2020.

By Arvind Bhunjun; arvindbhunjun@alliancenews.com

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