On a busy day for corporate news and with investors still cautious ahead of the latest US Federal Reserve meeting, leading shares have managed to edge into positive territory.
BT is leading the way, up 15.75p or 3.5% at 467.75p as the Competitions and Markets Authority provisionally cleared its £12.5bn purchase of mobile operator EE. The news comes a day before BT reports results, and Connor Campbell at Spreadex said:
Though the UK telecoms giant doesn’t report until tomorrow, news that CMA has approved its EE merger is likely sweeter than anything the company can produce with its second quarter 2016 results.
Analysts also believe the news could spur further takeovers in the sector.
Elsewhere British American Tobacco has added 70p to 3863.5p after a reassuring update. Its revenues for the first nine months of the year fell 6.5%, thanks to currency fluctuations. Excluding this they rose 4.2%, benefitting from price rises.
Rival Imperial Tobacco has risen 44p to £34.98.
Satellite communications group Inmarsat has climbed 14p to 983p as Credit Suisse raised its target price from £10.30 to £10.80 with an outperform rating. The bank lifted its revenue forecasts for 2017 to 2018 by 3% to 5% and said:
We update our estimates to reflect (1) the recent successful launch of the 3rd GX satellite; (2) the recent air-to- ground deal with Deutsche Telekom/Lufthansa; (3) an Inmarsat contract win announced by the US DoD on 8 September 2015; and (4) the now assumed launch of the 4th GX satellite. With GX now global we believe Inmarsat will have a sizeable competitive advantage over its peers for at least 1-2 years. We are ~3% ahead of 2017 post-event consensus EBITDA
But Meggitt has slumped 101.9p or more than 22% to 359.5p after the engineering group warned profits would be meaningfully below forecasts after a fall in defence sales, added to a weak performance from its energy business. Investec said:
We expect 2015 consensus earnings per share will likely come down by around 10%, and by more in 2016. Today’s warning raises questions on the timing of recent acquisitions and the cessation of the share buyback given weakness in the core businesses. We place our forecasts, target price and recommendation under review.
Miners continue to come under pressure amid weak commodity prices on worries about global growth, particularly in China.
Antofagasta is down 12.5p at 532p after it cut its full year production forecast for the third time this year.
Lloyds Banking Group has lost 3.41p to 73.99p as it put aside a further £500m to cover claims for mis-sold payment protection insurance.
Barclays is down 0.95p at 249.9p as it confirmed former JP Morgan director Jes Staley as its new chief executive on a pay package worth up to £8.24m.
Next has lost 80p to £78.65 despite an in-line third quarter sales update and a small rise in its full year forecasts.
But ahead of the Federal Reserve meeting, which is unlikely to sanction a rate rise but will be scoured for evidence of the bank’s thinking on policy for the rest of the year, the FTSE 100 is up 18.30 points at 6383.57.
