LONDON MARKET OPEN: Jupiter Shares Rise As It Nears Merian Merger

(Alliance News) - Stock prices in London opened higher on Monday, with Jupiter Fund Management leading the midcap index, while investors took heart from additional stimulus measures announced by the Chinese government.

The FTSE 100 index was up 18.49 points, or 0.3% at 7,427.62. The FTSE 250 was 44.56 points, or 0.2% at 21,834.64, and the AIM All-Share flat at 966.76.

The Cboe UK 100 index was up 0.3% at 12,577.20. The Cboe UK 250 was up 0.1% at 19,670.66, and the Cboe UK Small Companies was down 0.1% at 12,478.40.

In European equities, the CAC 40 in Paris was up 0.2% and the DAX 30 in Frankfurt up 0.3%.

The Japanese Nikkei 225 index closed down 0.7%. In China, the Shanghai Composite closed up 2.3%, while the Hang Seng index in Hong Kong closed up 0.5%.

Over the weekend, China's central bank offered additional funds to banks to help manufacturers and businesses amid the coronavirus outbreak. In addition, China's central bank cut the interest rate of medium-term lending facility to 3.15% from 3.25% on Monday.

CMC Markets analyst Michael Hewson said: "The continued rise in equity markets on both sides of the pond, appears to run counter to the narrative of a global economy that is likely to be much weaker over the course of the rest of the year, due to the continued ripple out effects of the coronavirus, which is likely to act as a significant brake on economic activity, not only now, but for the next few months.

"While this slowdown may well prompt further easing from global central banks, with China cutting a key rate overnight, and the recent falls in yields more broadly which has prompted the move into stocks, those who suggest that there will be a v-shaped rebound once the virus has been contained may well be being overly optimistic."

In the FTSE 100, InterContinental Hotels Group was the best performer, up 1.4% ahead of the hotel operator's annual results on Tuesday.

At the other end of the large cap index, NMC Health was the worst performer, down 5.6% after its billionaire founder resigned as co-chair in a mass board exodus at the embattled private healthcare firm.

NMC Health said founder Bavaguthu Raghuram Shetty has resigned as joint co-chair with immediate effect, leaving Mark Tompkins as the sole non-executive chair of the company.

In addition, Chief Investment Officer Hani Buttikhi and Non-Executive Director Abdulrahman Basaddiq also have departed the company with immediate effect.

The UAE-focused private hospital group on Friday had announced the resignation of Vice Chair Khalifa Butti Omeir Bin Yousef amid a legal review.

In December, US short selling firm Muddy Waters Capital accused NMC of manipulating its balance sheet to understate debt, which the company firmly denied. Since then the stock has suffered from volatile swings as NMC has strived to restore its reputation among investors.

The stock is down 60% so far in 2020.

In the FTSE 250, Jupiter Fund Management was the best performer, up 8.2% after the fund manager confirmed a potential GBP370 million all-share deal for Merian Global Investors.

Jupiter will be issuing Merian shareholders 95.4 million shares, giving Merian shareholders an approximate 17% stake in the combined company. There is also an additional deferred payment of up to GBP20 million depending on performance targets being met.

Merian had asset under management of GBP22.4 billion as of the end of 2019, and the merger will create a company will assets of GBP65 billion.

Jupiter said the deal "significantly enhances" its UK investment capability, and widens the range of investment services available to clients.

At the other end of the midcap index, Tullow Oil was the worst performer, down 6.5% after the oil and gas company announced disappointing drilling results at the Marina-1 exploration well off the coast of Peru.

The well did not find any "significant" hydrocarbons, Tullow said. It was testing the La Cruz and Mal Pelo formations, with some minor gas shows found but no discoveries in the main targets.

The oil and gas firm said the well was drilled to a total depth of 3,022 metres, in water 362 metres deep. Marina-1 will now be plugged and abandoned.

Tullow has a 35% interest in the well, which is operated by Karoon Energy with a 40% stake. Pitkin Petroleum holds the remaining 25%.

The pound was quoted at USD1.3040 early Monday, up from USD1.3028 at the London equities close Friday.

The euro was quoted at USD1.0837 early Monday, marginally lower than USD1.0842 at the close Friday. Against the yen, the dollar was quoted at JPY109.83 early Monday, firm from JPY109.77 late Friday.

Brent oil was at USD57.26 a barrel early Monday, up from USD57.15 at the equities close Friday.

Gold was trading at USD1,582.30 an ounce Monday, flat against USD1,581.60 late Friday.

US financial markets are closed on Monday for the Presidents Day holiday.

By Arvind Bhunjun; arvindbhunjun@alliancenews.com

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