Equities in London began the week with a dip as traders digest German election results which saw Angela Merkel returned to power but the rise of a nationalist challenger party.
IC TIP UPDATES:
Shares in water company Pennon (PNN) are up slightly following the release a trading statement. The group is on track to meet expectations for the first half of the year, while it continues to make progress on the exit from its Greater Manchester PFI contract and is expected to enter final commissioning for its Glasgow energy recovery facility this year. Pennon is expected to complete the tender offer for its 2013 6.75 per cent hybrid bond next month. Its new £300m 2.875 per cent hybrid bond completed on September 22 2017. Buy.
Half-year results for Amerisur Resources (AMER) were fairly well-guided, given the Colombian oil and gas explorer tells the market its average production every month. Of course, investors have been let down over the last half a year by lower-than-expected average production of 4,475 barrels, and full-year average output has been downgraded. But the year-end exit rate for daily production is unchanged, suggesting renewed confidence in the ramp-up. We remain buyers.
Shares in Central Asia Metals (CAML) re-listed this morning, after the miner successfully raised £113m in a 230p-a-share placing on Friday. The fundraising will be used to acquire Lynx Resources, operator of the SASA zinc-lead mine in Macedonia, in a $402.5m deal announced last week. We are reviewing our buy call today.
KEY STORIES:
Tullow Oil (TLW) and Kosmos Energy (KOS) are both up this morning, after an international tribunal judged the TEN fields to be east of the boundary between Ghana and Côte d'Ivoire, subject of a dispute. This has cleared the way for the partners to restart development drilling.
Unilever (ULVR) has bought cosmetics business Carver Korea for €2.7bn (£2.4bn) in a move to strengthen its presence in the Asian market. Carver Korea was previously owned by Goldman Sachs, private equity firm Bain Capital, and its founder, and is currently the fastest growing skincare business in South Korea. Unilever also provided an update on the sale of its spreads business, which management is said to have told analysts is going well, though only the South African division has so far been sold. The consumer goods giant expects margins to increase from the currently level of 16.4 per cent. Shares were flat in early trading.
OTHER COMPANY NEWS:
Alpha Financial Consulting has announced its intention to float on the Alternative Investment Market, with the hope of raising £34m in new cash. The asset and wealth management consultancy services provider estimates its market capitalisation will be around £150m, if it successfully raises the money it wants. The offer would only open to institutional investors, with retail investors able to buy shares on the secondary market.
Shares in Vitec Group (VTC) rose 3 per cent in early trading, after the company announced its acquisition of two businesses – JOBY and Lowepro – from Daymen Group for a total cash consideration of $10.3m (£7.6m). Vitec has also acquired RTMotion for up to £3.4m in cash. The JOBY and Lowepro purchases bring “greater access to the fast growing iPhoneography and vlogging consumer accessories market” while enhancing Vitec’s US presence. Meanwhile, RTMotion will sit within the group’s creative solutions business unit, alongside other businesses such as Wooden Camera and Offhollywood.
