25th Feb 2020 08:53
(Alliance News) - Stock prices in London opened higher on Tuesday following sharp losses on Monday, with Prudential leading the blue-chip gainers after US activist investor Third Point made a case for a break up of the iconic UK insurer.
The FTSE 100 index was up 33.8 points, or 0.5%, at 7,190.63. The blue-chip index had closed down 247.09 points, or 3.3%, at 7,156.83 on Monday.
The FTSE 250 was up 126.41 points, or 0.6%, at 21,244.21, and the AIM All-Share was up 4.03 points, or 0.4% at 946.97.
The Cboe UK 100 index was up 0.5% at 12,172.20. The Cboe UK 250 was up 0.4% at 19,143.66, and the Cboe UK Small Companies was flat at 12,376.40.
In European equities, the CAC 40 in Paris was up 0.3% and the DAX 30 in Frankfurt up 0.4%.
On the London Stock Exchange, Prudential was the best blue-chip performer, up 2.6% after the life insurer said it received a letter from Third Point and said it "looks forward to commencing a dialogue" with the US hedge fund.
Dan Loeb's New York-based Third Point sent a letter to Prudential on Monday saying it had acquired just under a 5% stake in the 332-year old insurer. Third Point said it there was no "strategic rationale" for Prudential to be listed in London, demanding it ends its 172-year presence in the UK as it no longer has operations in the country, having spun off M&G.
Third Point said Prudential should split its Asian and US businesses into two separate listed companies.
Anglo American was up 1.7% after Barclays raised the miner to Overweight from Equal Weight.
At the other end of the large cap index, Meggitt was the worst performer, down 4.7% after the aerospace parts maker warned growth in 2020 will be hindered by the halt to production of Boeing's 737 MAX aircraft, alongside disruption caused by coronavirus.
Meggitt reported revenue of GBP2.28 billion in 2019, up 9% from GBP2.08 billion in 2018, lifting pretax profit 33% to GBP286.7 million from GBP216.1 million.
The company posted organic revenue growth of 8%, which it said reflected a strong performance in growing end-markets. Within this, there was 8% growth in civil aerospace, 11% in defence and 10% in energy.
Meggitt declared a full-year dividend of 17.50 pence, up 5.1% from 16.65p in 2018.
Looking ahead, Meggitt said "sector specific factors" including the production halt of the grounded Boeing 737 MAX and supply chain disruption, as well as the "wider macroeconomic impact" of coronavirus are expected to hold back margin progression in the short-term.
Croda International was down 1.5% despite the speciality chemicals company saying its "strong business model" delivered a resilient performance in subdued market conditions in 2019.
For 2019, Croda reported a decline in revenue of GBP1.38 billion, down from GBP1.39 billion in 2018, while pretax profit fell 4.9% to GBP302.3 million from GBP317.8 million. Operating profit fell 1.8% to GBP339.7 million from GBP342.5 million. The company attributed the fall in earnings to difficult market conditions in Personal Care unit and Performance Technologies division.
Revenue from Croda's Personal Care unit - which is the company's growth driver - came in at GBP485.2 million in 2019, down from GBP487.8 million in 2018. In Performance Technologies, revenue was GBP430.2 million, down from GBP456.4 million in 2018. Croda International raised its full-year dividend by 3.4% to 90p from 87.0p in 2018.
In the FTSE 250, SIG was the worst performer, down 11% after building products company said Chief Executive Officer Meinie Oldersma and Chief Financial Officer Nick Maddock have resigned from their respective roles with immediate effect.
Back in December, the Sheffield-based building materials company said Oldersma had taken a leave of absence of "a number of weeks" due to a family illness.
The company has appointed Steve Francis as CEO on an initial contract until December 31 and appointed Kath Kearney-Croft as interim CFO. Kearney-Croft was brought in as finance director during Oldersma's leave of absence, while Francis is former head of collapsed cafe operator Patisserie Valerie.
SIG said its 2019 results are anticipated to be in line with the guidance provided in January of underlying pretax profit of GBP42 million. In January, the building products supplier guided for a substantial drop in profit for 2019, amid challenging market conditions and declining revenue.
The Japanese Nikkei 225 index closed down 3.3% on Tuesday. In China, the Shanghai Composite ended down 0.6%, while the Hang Seng index in Hong Kong closed up 0.2%. Financial markets in Japan reopened on Tuesday after being closed on Monday for a holiday.
The pound was quoted at USD1.2939 Tuesday morning, firm from USD1.2928 at the London equities close on Monday.
On the political front, the substance of Brexit trade talks are due to be finalised as ministers on both sides of the Channel prepare to sign-off on their negotiation red lines.
The EU General Affairs Council is set to meet on Tuesday morning in Brussels to approve the bloc's mandate for trade talks with the UK, which are gearing up to start next month.
The announcement on Brussels' agreed terms, which could be controversial after earlier drafts contained what Downing Street read as a veiled reference to the Elgin Marbles, is expected in the afternoon.
The euro was quoted at USD1.0855 Tuesday morning, lower than USD1.0862 at the close on Monday. Against the yen, the dollar was quoted at JPY110.84, up from JPY110.56 late Monday.
Brent oil was quoted at USD56.71 a barrel Tuesday morning, up from USD55.65 at the equities close Monday.
Gold was quoted at USD1,637.32 an ounce Tuesday morning, down from USD1,671.11 late Monday.
By Arvind Bhunjun; [email protected]
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