LONDON MARKET OPEN: Stocks mixed; Biden deal lifts industrial firms

(Alliance News) - Stock prices in London were mixed on Friday, with the FTSE 100 seeing a modest early rise, though failing to replicate the rallies seen in Asia and New York overnight after US President Joe Biden announced a bipartisan infrastructure deal has been agreed.

The proposal would still need to pass through US lawmakers, though striking a deal on the USD1.2 trillion package was enough to lift stocks in the US overnight and Asia on Friday.

The FTSE 100 index was up 14.25 points, or 0.2%, at 7,124.22 early Friday. The mid-cap FTSE 250 index was down 11.17 points, or 0.1%, at 22,498.95. The AIM All-Share index was up 0.50 of a point at 1,238.98.

The Cboe UK 100 index was up 0.1% at 709.11. The Cboe 250 was down 0.2% at 20,210.73, and the Cboe Small Companies fell 0.2% to 15,306.10.

In Paris, the CAC 40 was up 0.1%, while Frankfurt's DAX 30 rose marginally.

"The USD1.2 trillion infrastructure deal approved by the president will provide a boost to roads, bridges, broadband, passenger and freight services. Quite apart from the further injection into revitalising the economy, the amount is less than the USD3 trillion which had been sought by the President, thus having lower tax implications than had been thought to pay for it," Interactive Investor analyst Richard Hunter commented.

In London, building materials firm CRH, which has a US unit, was among the best large-cap performers, up 2.3%. Equipment rental firm Ashtead rose 1.6%. In Paris, Vinci rose 0.5% and Bouygues was up 0.6%.

Sterling was quoted at USD1.3903 early on Friday in London, largely flat from USD1.3900 at the equities close on Thursday. The euro stood at USD1.1938, improved from USD1.1930. Against the yen, the dollar was trading at JPY110.77, down from JPY110.86.

Equities in Asia were boosted by the US infrastructure agreement. The Nikkei 225 in Tokyo ended up 0.7% in late trade, while the S&P/ASX 200 rose 0.5% in Sydney. The Shanghai Composite closed 1.2% higher and the Hang Seng in Hong Kong was up 1.3% in late trade.

Carriers stocks nudged higher early Friday after the UK government relaxed some travel rules.

British Airways parent International Consolidated Airlines Group was up 0.1%, easyJet rose 0.9% and Ryanair was up 0.6%.

Fully vaccinated travellers from amber list countries may no longer have to self-isolate, UK Transport Secretary Grant Shapps said Thursday as he opened up holidays to several Mediterranean hotspots.

Shapps followed the administrations in Scotland and Northern Ireland in adding Malta and Spain's Balearic islands to the ranks of green list countries.

The list – from which returning travellers are not required to self-isolate – has also been extended to a number of Caribbean destinations including Bermuda, Antigua, Barbados and Grenada.

The travel industry has voiced frustration, however. Of the 14 nations added to the green list, all but one - Malta – were also put on a watchlist, which means they are at risk of returning to the amber list. France, Greece, Italy and mainland Spain remain off limits to UK holidaymakers.

UDG Healthcare rose 0.9%. A private equity firm is considering raising its offer for the company, which the healthcare services provider said it will accept.

Nenelite, following talks with some of the FTSE 250-listed firm's shareholders, is mulling an improved takeover bid of 1,080 pence per share. This would value UDG's share capital at around GBP2.72 billion.

Nenelite, an affiliate of private equity manager Clayton, Dubilier & Rice, made a previous offer of 1,023p per share, which valued UDG's share capital at GBP2.61 billion.

UDG's stock was trading at 1,055.00p on Friday, giving a market capitalisation of GBP2.65 billion.

"The board of UDG has indicated to Bidco that if the possible increased final offer is made it intends to recommend it," UDG added.

"The board of UDG confirms that it has not received any other proposals from any third party regarding an alternative proposal to acquire UDG since the date of the 2.5 announcement and confirms it is not in discussions with any third parties regarding an alternative proposal to acquire UDG."

Amigo shares rallied 8.7%. The guarantor loans provider said sealed a deal to extend the waiver period for a securitisation facility performance trigger to September 24, from June 25. It had been extended to June 25 back in November.

Since Amigo has suspended all new lending activity, the size of the financing has reduced to GBP100 million from GBP250 million, it noted.

"All cash generation arising from customer loans held within the facility is restricted and will continue to be used during the extended waiver period extension to further reduce the outstanding balance of the facility. As of the date of this extension, the facility was drawn at GBP27 million," Amigo said.

The company added that talks with the UK Financial Conduct Authority are still ongoing. This could see revised terms for its scheme of arrangement or even insolvency, Amigo cautioned.

At the end of December, Amigo pursued a scheme of arrangement in order to attain certainty on the total liabilities from customer complaints. It believed that a scheme would prove to be the best vehicle for addressing customer redress claims, but admitted that the plan would not allow all claims arising from unaffordable lending to be paid in full.

The UK High Court rejected its scheme to settle the compensation claims back in mid-May. The scheme would have made at least GBP15.0 million available to a million past and present customers. There is also the potential for a further GBP20.0 million and annual contributions worth 15% of Amigo's pretax profit over the next four financial years. Some 95% of customers had voted in favour of the scheme.

Brent oil was quoted at USD75.58 a barrel on Friday morning in London, up from USD75.50 late Thursday. Gold was quoted at USD1,782.54 per ounce, up against USD1,779.00.

The economic events calendar on Friday US personal consumption expenditure index figures for May released at 1330 BST - the core PCE reading is the Federal Reserve's preferred gauge of inflation.

By Eric Cunha; ericcunha@alliancenews.com

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