27th Mar 2019 08:45
LONDON (Alliance News) - Improved market sentiment stretched into a second day on Wednesday, causing the FTSE 100 to build on the previous session's gains despite selling pressure on tobacco major Imperial Brands. Meanwhile, Debenhams shares shot up on news that Sports Direct is mulling a GBP61 million takeover offer for the department store at a premium to Debenhams's current depressed share price. The FTSE 100 index was up 12.12 points, or 0.2%, at 7,208.41 on Wednesday. The FTSE 250 was up 47.93 points, or 0.3%, at 18,944.17, while the AIM All-Share index was up 0.2% at 906.43.The Cboe UK 100 index was up 0.1% at 12,231.32. The Cboe UK 250 was up 0.2% at 16,990.79, and the Cboe UK Small Companies flat at 11,120.04.In mainland Europe, the CAC 40 in Paris and the DAX 30 in Frankfurt were flat and up 0.1%, respectively, in early dealings.The positive open in Europe, said Michael van Dulken at Accendo Markets, comes "courtesy of sentiment recovering in the US last night even if Asian markets are mixed, after a sharp contraction in China industrial profits growth"."Much of the positivity comes after China's Beige Book survey reported 'an unmistakable Q1 recovery' in China, with strong economic growth compared to both the previous quarter and year, driven by faster pace of borrowing," he added. "This offsets some of the recent concerns about global slowing."In Asia on Wednesday, the Japanese Nikkei 225 index closed down 0.2%. In China, the Shanghai Composite ended up 0.9%, while the Hang Seng index in Hong Kong closed up 0.6%.Ferguson sat atop London's FTSE 100, up 1.5% after JPMorgan raised the plumbing and heating products distributor to Overweight from Neutral. Ferguson had closed down 7.2% on Tuesday after guiding to a slowdown in growth in the second half of its financial year. Imperial Brands was at the bottom of the FTSE 100, down 1.2% despite saying it remains on track to meet annual expectations, with revenue at the upper end of guidance, amid "significant" growth from its myblu vaping offering.Imperial said it remains on track to meet constant currency net revenue growth at, or above, the upper end of its 1% to 4% range, and earnings per share growth within a range of 4% to 8%.The myblu next generation vaping product has been performing well, with increased investment driving brand awareness and resulting in "significant" year-on-year revenue growth. However, there were "some constraints" in the US due to market uncertainty caused by the US Food & Drug Administration.Imperial Brands said it is on track to deliver "modest" revenue growth in Tobacco, with growth weighted to the second half, which should "more than" offset a "slight decline" in the first. Hilton Food group was up 1.9% after reporting double-digit revenue and profit growth in 2018, believing it should be well-placed to weather Brexit uncertainties.Revenue for the 52 weeks to December 30 rose 22% to GBP1.65 billion as pretax profit climbed 27% to GBP43.3 million. The food packing firm boosted its dividend by 13% to 21.4p.Hilton Food said its operating performance in the first few months of 2019 has been in line with expectations, and the business should be "sufficiently resilient" to withstand Brexit uncertainties whilst minimising disruption. Sports Direct was 1.4% higher after saying it is considering a GBP61.4 million takeover offer for Debenhams in its latest attempt to take control of the struggling department store chain. Debenhams shares were up 52% to 3.33 pence, having closed at 2.198p on Tuesday. They spiked briefly to match the 5p per share offer price floated by Sports Direct; however they remain well below their price of 21.50p only 12 months ago. The offer is conditional on Debenhams "immediately" appointing Mike Ashley as chief executive. Ashley is currently CEO of Sports Direct.Sports Direct already holds just under a 30% stake in Debenhams."Sports Direct believes that the possible offer would offer fair and full value for Debenhams. It does not believe that Debenhams has the same value if it is (in effect) handed over to Debenhams' existing lender group," Sports Direct said in a statement, though emphasising that it has not yet made a firm offer, and there is no certainty that it will.In an ongoing tussle between the two companies, Sports Direct at the start of the week criticised a lack of engagement from Debenhams as it offered the company GBP100 million for the acquisition of its Danish business, Magasin du Nord, as an opportunity for Debenhams to alleviate its current financial problems.Then, Sports Direct on Tuesday said it was considering making a cash offer for Debenhams. Debenhams at that time responded that any offer from Sports Direct needed provide an offer price, a "clear plan" on how Debenhams' debt will be repaid and must address how the company's immediate funding requirements will be met. Meanwhile, there was drama with another Sports Direct investee. Shares in Goals Soccer Centres - in which Sports Direct holds an 18.9% stake - were suspended after the company said it has discovered a "substantial misdeclaration of VAT, going back over several years".The final value of this is yet to be established, but currently stands at around GBP12.0 million. Going forward, the VAT accounting policies that the company said it intends to adopt may hit profitability. Goals Soccer Centres said this may lead to a "material change" in its financial position, and it is unable to provider clarity on this without the receipt of further information. Consequently, the company requested the suspension of its shares from AIM.In Wednesday's economic calendar, US MBA mortgage applications are at 1100 GMT and Confederation of British Industry Distributive Trades Survey at 1100 GMT. The US trade balance is at 1230 GMT.Meanwhile, MPs in Westminster will be asked to take part in a paper ballot on a series of "indicative votes" this evening in the hope of establishing what sort of Brexit could command a majority in Parliament.Immediately before the votes, the UK prime minister will address Tory MPs at a meeting of the backbench 1922 Committee, where she is expected to seek further support for her agreement with the EU, rejected by 230 votes in January and 149 in March.The agreement, and a political declaration on future EU/UK relations, must be passed by Friday if the UK is to benefit from an automatic delay in the date of Brexit to May 22. If not, it has to April 12 to make new proposals or leave without a deal.No final victor is expected to emerge from Wednesday's votes, but the most popular options will be subject to further debate on Monday to try to whittle the list down.Sterling was quoted at USD1.3199 early Wednesday, lower than USD1.3219 at the London equities close on Thursday.
Related Shares:
Hilton FoodsDebenhamsFergusonSports DirectImperial BrandsGOAL.L