LONDON MARKET OPEN: ARM Leads Rising Market But Tour Operators Down

LONDON (Alliance News) - Stocks in London were higher shortly after the open Monday, with ARM Holdings shares rocketing to the top of the FTSE 100 after the company confirmed it has agreed to be acquired by SoftBank Group for GBP24.3 billion.

The FTSE 100 was up 0.7%, or 43.20 points at 6,713.14. The FTSE 250 was 1.0% higher at 16,894.26, while the AIM All-Share was adding 0.2% at 725.49.

Shares in ARM were up 45% at 1,729.00 pence. The FTSE 100-listed group, which makes chips used in smartphones and other connected devices, said Japanese technology and telecommunications conglomerate SoftBank will pay 1,700.00p per share.

That represents a 43% premium to ARM's closing price on Friday of 1,188.73p and a 42% premium to the all-time high that ARM shares hit in March 2015. The agreement earlier had been reported by the Financial Times newspaper.

SoftBank said is intends to maintain ARM's existing management team and brand and will maintain the company's headquarters in Cambridge. It plans to at least double ARM's UK headcount over the next five years and will boost the group's employee numbers internationally too. ARM's board said it unanimously recommends the offer.

Accendo Markets analyst Michael van Dulken said the positive open comes after the Turkish government took back control after a failed military coup. However, the analyst said that "this happening so soon after the tragic events in Nice last week simply adds to plentiful pre-existing geopolitical tension".

Van Dulken said investors will focus on the potential consequences the events in Turkey for both Middle East and European stability given the country's strategic geographic location.

Travel stocks were mixed. Air carriers International Consolidated Airlines Group and easyJet up 2.2% and 1.0%, respectively. However, travel operator TUI Group was down 1.6% and FTSE 250-listed Thomas Cook Group was the biggest mid-cap decliner, down 5.4%.

Shares in FTSE 100-listed AstraZeneca were up 0.6%. The drugmaker said its Tagrisso lung cancer treatment met its primary endpoint in phase 3 trials. AstraZeneca said the drug demonstrated superior progression-free survival rates in comparison to standard platinum-based doublet chemotherapy.

British Land was down 0.4%. The commercial property investor said that, while too early to assess the impact the UK's vote to leave the European Union will have on property markets in the UK, it does anticipates some extra caution from occupiers and investors.

Due to this, Liberum kept a Sell recommendation on British Land, but the broker acknowledged that it was a "robust quarter" for the real estate group.

British Land said that, in the first quarter to the end of June, it secured 256,000 square feet of retail lettings and renewals. Retail footfall in its properties was flat in the quarter, it said. Office lettings and renewals in the quarter totalled 25,000 square feet. Its said its occupancy rate is at 99% and confirmed its dividend for the first quarter of 7.30 pence per share, 3.0% higher year-on-year.

Ahead in the economic calendar on Monday, Bank of England Monetary Policy Committee member Martin Weale is due to make a speech at 0915 BST, and the Bundesbank's monthly report is at 1100 BST. Later in the day is the US National Association of Home Builders' housing market index.

Already released, the average asking price of a house in the UK was down 0.9% in July from the month before, property tracking website Rightmove said on Monday - coming in at GBP307,824. That followed a 0.8% increase in June. On a yearly basis, prices advanced 4.5%, slowing from 5.5% in the previous month.

Meanwhile, British retailers logged the steepest decline in footfall since early 2014, data published by the British Retail Consortium and Springboard showed. In June, footfall dropped 2.8% in June from last year, following a 0.3% rise in May. This was the sharpest fall since February 2014.

In Asia on Monday, the Tokyo market was closed for the Marine Day holiday. In China, the Shanghai Composite index fell 0.4%, while the Hang Seng index in Hong Kong continues up 0.7%.

By Daniel Ruiz; danielruiz@alliancenews.com

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