Talk of a possible flotation of Prudential's Asian business lifted shares in the insurance group today.
They ended 20p higher at 716.5p as analysts at Societe Generale raised the prospect of an Asian IPO in a note following a presentation by Pru chief executive Mark Tucker last week.
They said: "According to the chief executive, Prudential''s Asian operations in particular are undervalued. In order to get the value better reflected in the share price, Prudential is assessing several possibilities which could potentially even be as far reaching as an IPO for the Asian operations."
Elsewhere the market made a reasonable start to the week despite the surprise news that Swiss bank UBS was writing off another $10bn in sub-prime related loans.
The FTSE 100< closed up 10.5 points at 6565.4, with housebuilders leading the way in the wake of last week's UK interest rate rise. Wall Street was also higher on hopes of a US cut tomorrow.
Persimmon and Taylor Wimpey both rose more than 4%, while directories group Yell climbed nearly 6% after an investors' day on Friday.
However, investors in Rio Tinto did not know which way to turn. Talk that US group Blackstone, in tandem with a Chinese partner, was planning a bid to rival the existing BHP Billiton offer saw Rio's surprisingly shares fall back. This afternoon, as Blackstone denied any interest, they moved higher. It was, of course, not as simple as that.
Other factors were at play including news that Rio plans to write to the Takeover Panel to ask BHP to put up or shut up, and the suspension of shares in another rumoured Chinese bidder, Baosteel, today for so far unspecified reasons. Baosteel has previously denied it was interested in bidding, but the picture is so muddy, investors are now prepared to believe anything. Rio added 38p to £57.84, having earlier fallen as low as £56.62.
