MARKET REPORT: Merger mania pushes Footsie to two-year high


The FTSE 100 climbed to a two-year high and a fresh post-pandemic record as takeover talk gripped the City.

The blue-chip index rose 0.9 per cent, or 68.28 points, to 7611.23, the first time it has topped 7600 since January 2020, a month before the onset of Covid-19 sent global stock markets into meltdown.

GlaxoSmithKline helped lead the FTSE 100’s ascent, gaining 4.1 per cent, or 66.8p, to 1707.8p, following news of Unilever’s attempted swoop on the pharma giant’s consumer healthcare business.

New high: The blue-chip index rose 0.9%, to 7611.23, the first time it has topped 7600 since January 2020, a month before Covid sent markets into meltdown

Unilever shares, however, were down 7 per cent, or 274.5p, at 3662p as traders surmised that such a takeover could be a step too far for the consumer goods group.

But arch rival Reckitt Benckiser – which makes Dettol and Air Wick – gained 3.3 per cent, or 202p, to 6397p. Reckitt also appointed a City heavyweight to its board.

Alan Stewart, the former chief financial officer of Tesco (up 1.6 per cent, or 4.45p, to 289.45p), Marks & Spencer (up 0.1 per cent, or 0.2p, to 223.5p) and ex-finance director at WH Smith (up 1.2 per cent, or 18p, at 1582.5p), will join the firm as a non-executive director at the start of next month.

Stock Watch – Access Intelligence

Access Intelligence, a public relations and communication software group, plunged to a ten-month low after warning of the ‘severe’ impact of Covid-19 on its South-East Asian markets.

The hit in the region lasted longer than expected, particularly in its key markets of Singapore, Malaysia and Indonesia, with the situation exacerbated by the emergence of Omicron.

Its performance will be hit in both 2022 and 2023. Shares fell 23.6 per cent, or 36p, to 116.5p.  

The buzz around takeovers looks set to continue across 2022, with analysts at Peel Hunt predicting merger and acquisition activity among UK companies was ‘likely to increase’ as factors such as uncertainty, shareholder activism and inflation created buying opportunities. Positive broker assessments were also helping push the FTSE 100 higher.

Insurer Admiral Group added 4.2 per cent, or 130p, to 3241p after it received an upgrade to ‘hold’ from ‘reduce by analysts at HSBC, who also raised their target price on the stock to 3150p from 3050p. 

Chilean copper miner Antofagasta was also on the up, climbing 4.2 per cent, or 57.5p, to 1436.5p as UBS upgraded the stock to ‘neutral’ from ‘sell’ and hiked their target to 1400p from 1300p. 

Housebuilder Taylor Wimpey also jumped 4.2 per cent, or 6.45p, to 160.4p following a positive trading update.

Shell and BP bobbed higher after they were selected to build new windfarms off the coast of Scotland. 

Shell shares were up 1.3 per cent, or 22.8p, at 1845.4p while BP rose 1.3 per cent, or 5.05p, to 393.75p. Another winner, energy firm SSE, added 0.4 per cent, or 6.5p, to 1583p.

Oil firms got a lift after analysts at SEB Research predicted crude prices could hit $100 a barrel as demand recovered from the emergence of the Omicron variant and supply remained tight. Crude stands at around $86. 

An unexpected cut to interest rates by the Chinese central bank also helped to boost the market’s mood.

Elsewhere, cybersecurity group and stock market darling Darktrace tumbled 7.1 per cent, or 31.4p, to 413.2pp following a broadside from short-seller Shadowfall.

The fund, nicknamed the ‘dark destroyer’ in the City, criticised the FTSE 250 firm’s business as being ‘watery thin’ having revealed a bet against the company back in October.

Investment manager Ashmore dropped 1.1 per cent, or 3.2p, to 286.2p after it flagged ‘challenging market conditions’ as inflation, Covid-19 variants and weaker growth in China weighed on its portfolio.

The value of its assets under management stood at £64billion at the end of December, down from £67billion at the end of September.

Blue-chip pharma firm Hikma climbed 0.6 per cent, or 13p, to 2069p after it snapped up the Canadian business of bankrupt US firm Teligent for £33.5million.

The purchase, which is expected to complete in the first quarter of 2022, marks an expansion of Hikma’s business into Canada and includes a portfolio of 25 injectable medicines.

The FTSE 250, meanwhile, rose 0.6 per cent, or 128.29 points, to 22,871.64.

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