Leading shares have been lifted by hopes of a Greek deal as the final, final deadline for an agreement with its creditors which will avoid it exiting the euro.
The FTSE 100 is currently 63.43 points higher 6645.06 after the Greek government appeared to back down and accept terms for a new financial package. Other European markets are also higher, with Germany’s Dax up 1.8% and France’s Cac climbing 2.3%.
Back in the UK, InterContinental Hotels is 84p higher at £26.90 after it agreed the sale of its Hong Kong hotel - the last remaining flagship site - for $938m to Supreme Key, a consortium of investors. Some of the proceeds may be returned to shareholders. Numis said:
IHG had made it clear that the hotel was on the market. This looks like a very acceptable price (22 times EBIT) to us and the achieved price is some $150m above our expectation.
Credit Suisse said:
Following... the disposal of the Hong Kong InterContinental for $938m, we update estimates to also capture an assumed $1.5bn special dividend to be paid in the second quarter 2016. Our 2017 earnings per share estimate rises 6% and our target price moves to 2820p (from 2700p) but after the initial share price move this morning and with limited target price upside potential, we retain a neutral rating.
International Airlines Group is up 11.5p at 526p as Ryanair said it would accept the airline’s offer for its 30% stake in Irish carrier Aer Lingus. The €1.3bn deal is now set to go ahead.
Mining shares have been lifted by a recovery in metal prices, linked to a revival in the Chinese stock market after recent falls. BHP Billiton is 25.5p better at 1231.5p while Rio Tinto has risen 41p to 2569.5p.
Housebuilders have been lifted by UK government plans to boost home building, with Barratt Developments up 10p to 630.5p.
Among the mid-caps Premier Oil has put on 6.5p to 146p as Jefferies raised its target price to 185p from 170p in the wake of Thursday’s update:
Premier’s trading update leads us to believe that guidance may be too conservative. Additionally, Solan timing (and costs) to first oil seems to have stabilised and Pakistan assets have attracted an approach. Operational momentum seems to be building even while the stock has traded down since our initiation in May. We upgrade to buy on the basis of continued operational delivery in the second half of 2015.
