LONDON MARKET OPEN: Ashtead And IHG Rise After Bolstering Finances

(Alliance News) - Stock prices in London opened sharply higher on Monday as major economies edged toward reopening from coronavirus lockdowns, while Ashtead and InterContinental Hotels rose after taking steps to strengthen their finances.

On the streets of hard-hit Spain, the government allowed children outside for the first time since mid-March. Italy, which shut down early in March, gave the green light for wholesale stores and restaurants to resume business on May 4 and for people once again to stroll in parks and visit relatives. In New York State, Governor Andrew Cuomo said that a first stage of a reopening would start on May 15 if hospitalisations decrease.

The large-cap FTSE 100 index was up 83.59 points, or 1.5%, at 5,835.59 early Monday. The mid-cap FTSE 250 index was up 231.15 points, or 1.5%, at 15,918.58. The AIM All-Share index was up 0.7% at 787.26.

The Cboe UK 100 index was up 1.5% at 9,881.15. The Cboe 250 was up 1.0% at 13,711.25 and the Cboe Small Companies up 0.1% at 8,831.68.

In mainland Europe, the CAC 40 in Paris was up 1.6%, while the DAX 30 in Frankfurt was up 2.4% early Monday.

In the FTSE 100, Ashtead Group rose 4.7% after the equipment rentals firm said it remains in a strong financial position with long-term committed debt facilities, despite lockdowns putting pressure on end-markets.

In response to the coronavirus crisis, the company has modelled a variety of downside scenarios over the coming year. Under such scenarios, Ashtead said it remains free cash flow positive throughout the next financial year.

Further, Ashtead said it has accessed an additional USD500 million through its senior-secured credit facility for one year, increasing the facility size to USD4.6 billion. Ashtead has suspended all merger and acquisition activity, as well as reducing its planned capital expenditure for the year ending April 2021 to GBP500 million from the initial range of GBP1.1 billion to GBP1.3 billion.

InterContinental Hotels Group was up 4.0%. IHG said it has secured new financing arrangements to bolster its liquidity.

It said the Bank of England has confirmed IHG as an eligible issuer for the UK government's Covid Corporate Financing Facility, and IHG has issued GBP600 million in commercial paper under this facility. IHG said it now has access to USD1.35 billion of cash on deposit and existing bank facilities are currently USD660 million undrawn, taking total available liquidity to USD2 billion.

In the FTSE 250, Redrow was up 4.7%, as the housebuilder outlined plans to reopen its sites and return to construction. On Monday, Redrow said it would start mobilising building sites the week commencing May 11, with a phased return to construction on May 18.

Some of Redrow's peers announced similar measures last week.

At the other end of the midcaps, Close Brothers was the worst performer, down 1.7% after Jefferies downgraded the merchant bank to Underperform from Hold.

The Japanese Nikkei 225 index closed up 2.7%. In China, the Shanghai Composite closed up 0.3%, while the Hang Seng index in Hong Kong is up 1.8%.

The pound was quoted at USD1.2441 early Monday, up from USD1.2333 at the London close Friday.

UK Prime Minister Boris Johnson is back in Downing Street, having returned to take charge of the UK government's response to the coronavirus outbreak. The prime minister is resuming full-time duties at the head of the government three weeks after he was hospitalised with the disease.

The PM will chair the regular morning meeting of the government's Covid-19 "war cabinet" before heading into a series of meetings with senior ministers and officials. Foreign Secretary Dominic Raab - who has been deputising for him in his absence - said he was "raring to go" after a fortnight convalescing at Chequers, his official country residence. Johnson arrived back on Sunday evening to a growing clamour from senior Tories to begin lifting the lockdown amid mounting concern at the damage it is causing to the economy.

The euro was quoted at USD1.0848 from USD1.0801. Against the yen, the dollar was quoted at JPY107.24 from JPY107.45.

Gold was trading at USD1,721.70 an ounce on Monday morning, flat from USD1,721.60 late Friday. Brent oil was quoted at USD20.78 a barrel, down from USD21.15 late Friday.

By Arvind Bhunjun; arvindbhunjun@alliancenews.com

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