By Carla Mozee, MarketWatch
Morrisons pretax profit halved; TSB soars on takeover talks
LONDON (MarketWatch) -- Strength in mining and energy stocks as
well as brewer SABMiller PLC helped push the U.K.'s benchmark FTSE
100 higher Thursday.
Making a splash among FTSE 250 midcap stocks , shares of TSB
Banking Group PLC rallied by 26% after the lender confirmed it is
in talks to be purchased
(http://www.marketwatch.com/story/tsb-shares-surges-26-after-banco-sabadell-offer-2015-03-12)
by Span's Banco de Sabadell PLC .
The FTSE 100 was trading higher as all sectors advanced, led by
the basic materials group. Antofagasta PLC , which climbed 2.5%
after reaching an agreement to end a protest at its Los Pelambres
copper mine in Chile.
Also among gainers, SABMiller shares rose 2.1%. Morgan Stanley
resumed coverage of the brewer with an overweight rating.
Meanwhile, Exane BNP Paribas said now is "arguably the best time"
for Anheuser-Busch InBev SA (AHBIY) to finance a bid on SABMiller,
given current conditions in the bond and foreign exchange
markets.
Although there are "limited synergies and execution risk, a deal
would boost [per-share earnings] and more importantly, help solve
ABI's volume issue. Tempting. If a deal doesn't happen soon, it may
never happen," wrote Exane BNP analyst Francois Mosnier, in a
note.
Wm Morrison Supermarkets PLC shares turned higher by 0.7%. They
had been at the bottom of the FTSE 100 earlier after the
supermarket chain's fiscal 2015 underlying pretax profit dropped by
more than half, to GBP345 million from GBP719 million
(http://www.marketwatch.com/story/morrisons-yearly-net-loss-widens-2015-03-12).
It also indicated a dividend cut, as for fiscal 2016 it expects to
pay a dividend of 5 pence per share or less.
Morrisons' results "are a miserable welcome for incoming CEO
David Potts who will have his work cut out to deliver a quick
turnaround for the retailer," as it is "bearing the brunt of its
GBP1bn investment in price reductions, which are spread across
three years," said Himanshu Pal, director of retail insights at
Kantar Retail, in a note. But positive developments come from a
stronger supply chain and improved logistics that will help
Morrisons compete against discounters and larger rivals, said
Pal.
Resources: In the mining group, shares of precious metal miner
Fresnillo PLC rose 3.6%, after having lost roughly 12% over the
past four sessions. Mining shares were aided by improvement in
prices for metals. Dollar-denominated commodity prices have been
under pressure in the wake of a surge by the U.S. dollar
(http://www.marketwatch.com/story/dollar-up-after-losing-a-chunk-of-gains-overnight-2015-03-11)
against other currencies. The closely watched ICE U.S. dollar index
(DXY) eased Thursday after jumping 2% more than the past two
days
Stock in Randgold Resources Ltd. rose 3.1% on Thursday, iron ore
producer Anglo American moved up 2.4% and Rio Tinto PLC (RIO) added
2.3%.
As dollar-denominated U.S. oil futures (CLJ5) and those for
Brent crude rose, so did oil and gas stocks. British oil major
Royal Dutch Shell PLC (RDSB) climbed 2.4%. BP PLC (BP) and BG Group
PLC each rose 1.9%.
Also gaining, ITV climbed 1% as it said it is agreed to purchase
Talpa Media BV for up to 781 million pounds ($1.17 billion). The
entertainment show producer is behind programs including "The
Voice", and company founder John De Mol established "Big Brother."
ITV will make an initial cash payment of GBP355 million for
Talpa.
The handful of stocks losing ground on the FTSE 100,
equipment-rental company Ashtead Group PLC and budget carrier
easyJet PLC each fell 0.7%.
The FTSE 100 on Wednesday
(http://www.marketwatch.com/story/ftse-100-higher-after-string-of-losses-2015-03-11)edged
up 0.3%.
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