The primary leading shares shook off the Ukraine and Iraq in their efforts to recover after two successive days of decline.
Shire, the prominent pharmaceuticals group was rather restless as investors were gripped by a new wave of takeover plans.
The shares hit a record high of £38.86 before sliding back to £36.60 with a 124p or 3.5 % increase on that opening day. The mechanism was a report from Reuters that the group had outsourced a prominent firm as its advisor because they were optimistic of an impending takeover approach.
The medical and pharmaceutical sector has recently been in the spotlight of bid activity of which Shire is not spared in the commotion. U.S. companies specifically have been very mindful on European deals in order to restructure their tax base and ease down on their liabilities.
The recent speculation placed Shire in the cross-hair of Astra or Bristol-Myers Squibb and possibly Allergan which fought off its own unwelcomed menaced in the likes of Valeant Pharmaceuticals. Moreover, Shire is most likely be regarded as possible sporadic M&A interest in the existing market.
In other events, Whitebread inched up 91p to £42.59 with a particular strong growth from the present hotel sector. Also, in a typical disparaging fashion, Morrison’s confirmation of 2,600 store management retrenchment cuts sent its shares up to 192.6p.
In general, despite the continuing upheaval in Iraq and the unrest between Ukraine and Russia, the FTSE 100 was able to finish 12.13 points at 6766.77 after two days of continued decline. Albeit better than expected U.K. inflation figures, investors are still very weary of the latest decision by the Fed regarding interest rates and more particularly, its monthly bond purchasing programme which is expected to be cut down by another $10 billion to $35 billion.
As the Federal Open Market Committee meeting is nearing, the market is becoming increasingly uptight and the reactions to economic data are likewise becoming more severe. Ahead of a big day for central banks, the default position is stagnation and prudence which left the FTSE 100 hanging at around 6760.
Among the prominent fallers were Ashtead, losing 55.5p to 831.5p on profit taking after the equipment rental group who reported a 50 % increase in full year earnings.
Summer trading is speculated to be strong despite foreign exchange headwinds on the revenue line and last year’s capital market’s day which acted as a catalyst.
Generally, returns remain on top as that they will provide an equal proportion of supply and demand for the next number of years, driven by real unit cost reduction and reticent unit revenue inflation. This is indeed very supportive of the valuation and that the cash generation is expected to remain strong in support of the dividend policy and periodical special dividends correspondingly.
Among the mid-caps, Crest Nicholson was able to climb 12p to 337p after news of a 37 % increase in first half profits at the housebuilder. However, Xaar slumped 205.5p to 537p after the inkjet printing specialist cautioned 2014 revenues to be below projected profit valuations.
Lower down the market is Serica Energy which managed to add 3.5 % to 11.125p after it took an 18 % interest in the Erkine Field, in the North Sea, from BP. As part of the transaction, BP will become a leading shareholder in Serica with an estimated stake of 10 % depending on the working capital adjustments.
Finally, MySale, an Australian based fashion flash-sale site, finally got its estimate correctly after last week’s fiasco when its newly listed shares were quoted in pounds and not in pence. It closed at 1870, which was 26.25p down on the day and was below the standard 226p issue price.