Merger Activities Lift FTSE

Ivaylo
10 Oct, 2006
New York City

Brambles, Man Group and First Choice were the leading gainers in London. Investors bought shares in Vodafone Group in midday trading on Tuesday as well after an article outlined some potentially positive aspects of the company. Brambles is still in the focus of General Electric and a potential bid is likely to surface soon. By late morning, the FTSE 100 advanced 0.2%.

[R]9:30AM FTSE 100 advances on Tuesday on merger speculation.[/R]
By late morning, the FTSE 100 was 24.5 points, or 0.2%, higher at 6,055.4, advancing to a five-year high.

Advancers

Man Group jumped 5.6% higher on reports that Goldman Sachs was considering a takeover of the hedge fund group. Dual-listed Brambles Industries rose 2.2% in the wake of a strong performance in Australia overnight. First Choice was up 5.7% as takeover speculation boosted the holiday group.

Amvescap gainer 5% after the fund manager said late on Monday that assets under management were were growing steadily from August and July. Shares of mining company Vedanta Resources advanced 0.6%. as the company second-quarter aluminum production advanced 71.7% to 79,000 tonnes, copper cathode production in India moved up 17.6% to 80,000 tonnes and Zambia copper cathode production decreased 16.2% to 31,000 tonnes.

Decliners

Corus fell 4.4% as the Anglo-Dutch steelmaker has held talks with Tata Steel of India but has yet to receive a firm bid proposal. Carnival slipped 1.9% after JP Morgan downgraded the cruise operator from overweight to neutral. The bank said there could be limited advanctage to the shares in the near term.

Northern Foods was 3.6% lower after it said underlying revenue for the 26 weeks to the end of September fell 1.1 per cent on the prior year. Inter Link Foods fell 14% following its previously announced talks with a private-equity firm in relation to a possible takeover have been terminated and no offer is anticipated.

FireOne also plunged 24.4% after its 76%-owner Optimal Group said that, in light of its expectation that U.S. Administration will soon sign into law the Unlawful Internet Gambling Enforcement Act of 2006, it would stop processing settlement for transactions originating from consumers that may be viewed as related to online gambling.

Other news

The trade gap of the UK was reduced a little in August after the deficit for July was revised upwards to reflect the effects of VAT fraud, according to official data.

[R]7:30AM Asian markets recover from N.Korea scare, end higher on Tuesday.[/R]
Asian markets ended higher on Tuesday.The Nikkei 225 Average in Japan finished up 0.3% at 16,477.3. Shares of Canon gained 0.9, while automaker Toyota shares rose 0.7%. Shares of Toshiba Corp gained 2% after the company said it will invest 5.5 billion yen ($46 million) in a venture to produce LCD panels with a Polish subsidiary of South Korea''s LG.Philips LCD Co.

South Korea''s Composite Stock Price Index, or Kospi, was up 0.7%, at 1,328.37, rebounding from a 2.4% slump in the previous session. South Korean steelmaker Posco Co. advanced as much as 2.1% on expectations of further industry consolidation in the wake of Tata Steel of India bid for the Anglo-Dutch Corus Group Plc. Shares of Samsung Electronics Co ended up 0.2%.

Hong Kong Hang Seng Index gained 0.8% to 17,823.7. The China Enterprises Index rose 1.3% and shares listed in Malaysia, New Zealand and Shanghai traded nearly flat. Singapore Straits Times Index edged up 1%, while Indonesia Jakarta Composite was up 0.7%.

Australia S&P/ASX 200 index advanced 1%. BHP Billiton advanced 3.1%. Upbeat oil prices inspired shares of oil and gas producers. Inpex Holdings Inc gained 1.5%. Australian Woodside Petroleum advanced 1.6%

[R]6:30AM European markets advanced, recovering from political concerns.[/R]
European markets were higher by mid-morning on Tuesday. London FTSE 100 gained 0.3% to 6,048.0, Frankfurt Xetra Dax added 0.5% to 6,111.41, and the CAC 40 in Paris climbed 0.4% to 5,306.83.

Advancers

EADS, the French aerospace group, rose 3.9% after the new chief executive of the company troubled Airbus unit said there would be painful job cuts. The U.K. index got a boost from mobile phone giant Vodafone shares of which climbed 2.4%.

French aero-engine maker, Safran, gained 3.3% after it revealed late on Monday its CFM56 engine set a new sales record at the company. Ras Holding gained 1.6% and French group Axa rose 1.1%

Banca Intesa in Italy rose 1.5% as it neared agreement on a sale of a number of its branches to Credit Agricole in order to meet regulatory terms for the approval of its merger with Sanpaolo IMI. Sanpaolo shares gained 1.3%. Sanofi-Aventis shares added 0.6%.

Decliners

There was no eminent decliner this morning in Europe.

Oil and gold

Crude oil for November delivery rose 58 cents to $60.54 a barrel in Asian electronic trading on the NYME. November Brent crude at London ICE Futures traded 31 cents higher at $60.85 a barrel.

Gold rose as high as $579.60 an ounce and slid to $578.40/579.40 an ounce, still higher than $576.00/577.10 an ounce late in New York.

Currencies

The euro inched down to $1.2598 from $1.2605.The dollar initially gained to 119.35 yen, its highest level since hitting 119.40 yen Feb. 3, but fell to 119.10 yen, down from 119.12 yen late Monday in New York. The British pound traded at $1.8672, compared with $1.8706 yesterday.

[R]5:30AM Gold futures advanced but fail to hit record highs despite support.[/R]
Gold for December delivery finished up $5.70 at $582.50 an ounce on the NYME, after touching a high of $585.20. Silver futures closed up 24.5 cents at $11.42 an ounce, while platinum added $15 to $1,095.80 an ounce and palladium was up $3 at $303.25 an ounce. Copper added 2.45 cents to $3.413 a pound.

Crude oil for November delivery closed up 20 cents at $59.96 a barrel, well below the day''s high of $61.30. November unleaded gasoline futures down 0.9 cents at $1.4949 a gallon and November heating oil up 3.57 cents at $1.7297 a gallon. November natural gas rose 0.2 cent to $6.429 per million British thermal units.