Proactive Investors -
- FTSE 100 firmer but off early highs
- Oil prices extends gains, BP (LON:BP) and Shell (LON:RDSa) rise
- Rathbones to merge with Investec's UK wealth busness
Rio supports Energy Resources fund raising
The Footsie has settled around 16 points to the good for now with its European counterparts ijn Frankfurt and Paris also in the green, up 0.4% and 0.3% respectively.
In company news, Rio Tinto PLC (LON:RIO) will support Energy Resources of Australia Ltd's recently disclosed plans for an interim entitlement offer, which seeks to raise up to AU$369mln.
In a statement the Anglo-Australian mining and metals company said this is to address funding requirements for the Ranger rehabilitation project in Northern Territory, Australia to the end of the second quarter of 2024.
Rio Tinto said it will subscribe for its full entitlement under the IEO for AU$319mln.
Funds raised will be used partly to repay a AU$100mln credit facility provided by Rio Tinto to assist ERA with its management of immediate liquidity issues.
Rio Tinto added funds from the IEO are not expected to generate any financial return and will be dedicated strictly to the Ranger project and repayment of the credit facility.
Okyo Pharma adds to London exodus
The FTSE has continued to hold firm but is well off earlier highs, now up 10 points.
OKYO Pharma Limited has become the latest firm to signal an exit from the UK stock market. The ophthalmology-focused bio-pharmaceutical company which is developing OK-101 to treat dry eye disease is to keep its main listing on Nasdaq.
Shares fell 20% on the news.
Victoria Scholar at interactive investor said: “This abandonment of its London listing adds to worries about corporate flight away from the London Stock Exchange post Brexit. WANdisco said last month it is proactively exploring the United States to create a dual listening.”
“Arm Holdings abandoned London as a potential location for its IPO, FTSE 100 building business CRH (LON:CRH) also said it was planning to list in the US and Flutter has been considering a secondary listing in New York.”
Heading the other were shares Digital 9 Infrastructure which rose 3% after it moved to reassure investors following continued volatility in its share price.
Shares in the investment firm, which specialises in the infrastructure used to run and manage the internet, have lost 27% over the last month, and 30% in the year to date.
But Digital 9 insisted earlier that it was not aware of any portfolio specific factors that might have caused the decline.
Virign Media offline
Virgin Media is racing to fix a problem with its broadband which has stopped working for thousands of customers today.
Nearly 29,000 users have reported issues with their service on the outage tracking website Downdetector.
The company tweeted: "We're aware of an issue that is affecting broadband services for Virgin Media customers as well as our contact centres.
We’re aware of an issue that is affecting broadband services for Virgin Media customers as well as our contact centres. Our teams are currently working to identify and fix the problem as quickly as possible and we apologise to those customers affected.— Virgin Media (@virginmedia) April 4, 2023
This is a map of areas hit so far.
"Our teams are currently working to identify and fix the problem as quickly as possible and we apologise to those customers affected,"
Virgin Media said.
FTSE firmer in early exchanges
The FTSE 100 made solid early progress as investors took encouragement that Australia’s central bank had paused its interest rate hikes.
At 8.15am London’s lead index was up 34.57 points or 0.45% at 7,707.57 while the FTSE 250 rose 78.18 points, or 0.4% to 18,957.59.
Richard Hunter, head of markets at interactive investor,said: "Despite some further strength in sterling which tends to hamper the primary index given its heavy exposure to overseas earnings, the FTSE100 traded higher in early exchanges, with broad based gains across several sectors."
In Australia, the central bank decided to leave interest rates unchanged at its April meeting. The cash rate target remains 3.60% and the interest rate on exchange settlement balances remains 3.50%.
This stoked hopes that interest rates could be close to peaking across the globe although the picture has been muddied once more by an energy shock, this time a sharp rise in oil prices following the surprise call by members of Opec+ to cut production which sent oil prices soaring on Monday.
Prices have continued to climb today with Brent crude 0.5% higher at US$85.29/barrel supporting BP PLC and Shell PLC up 0.5% and 0.6% respectively.
Elsewhere and Rathbones Group PLC firmed over 2% after news it is to combine with Investec’s UK wealth business to create the UK's leading discretionary wealth manager.
The all share deal will see Rathbones remain an independent listed company with Investec as a long-term, strategic shareholder.
Investec will have a 41.25% interest in Rathbones after the deal with voting rights limited to 29.9%. The deal values Investec’s UK business at £839mln.
The agreement excludes Investec’s wealth and investment businesses Switzerland and its international business.
The enlarged group will have around £100bn of funds under management and administration.
Shore Capital’s Ben Williams said the deal makes sense. He noted “Rathbones Group’s problem has been a lack of growth, because its clients are too old, and the omnibubble deflated a little.”
But he feels “this is an elegant step forwards in profitability.”
But Saga PLC fell back 2.4% despite a swing back into profit on an underlying basis at the year-end as revenue grew strongly due to continued Cruise and Travel recovery following the pandemic.
Revenue for the year ended 31 January advanced 54% to £581.1mln from £377.2mln a year prior with underlying pre-tax profit of £21.5mln compared to a loss of £6.7mln in the comparative period.
The insurance company which focuses on the over 50s posted a reported loss before tax of £254.2mln, widened from £23.5mln, reflecting a £269.0mln impairment of insurance goodwill reported at the half-year stage.