MARKET REPORT: NMC Health given shot in the arm as shares soar 37% after it opens independent review into Muddy Waters’ claims
Private hospital group NMC Health gave its share price a booster jab yesterday after it opened an independent review to examine claims made by an aggressive short-seller.
The beleaguered firm has brought in an unnamed leading accountant to delve into its books and assess whether an attack by US hedge fund Muddy Waters has any merit.
Its share price rocketed 36.8 per cent, or 479p, to 1779.5p on the last full day of trading before Christmas.
NMC Health has brought in an unnamed leading accountant to delve into its books and assess whether an attack by US hedge fund Muddy Waters has any merit
The climb came after it shed more than half of its value last week after Muddy Waters said it had taken a short position in the group and raised ‘serious doubts’ about NMC’s finances and relationship with its auditor.
In a detailed rebuttal, NMC denied Muddy Waters’ claims.
Yesterday Muddy Waters, which is run by short-seller Carson Block, was quick to double down on its allegations, saying such reviews ‘are usually exercises in whitewashing that provide little to no transparency or accountability’. But this did little to dent investors’ relief that the Middle East-focused group could shake off the allegations.
The FTSE 100 and FTSE 250 both closed higher on a relatively quiet day, as trading floors began winding down for Christmas.
Stock Watch – National Accident Helpline-owner
Shares in National Accident Helpline-owner NAHL Group fell 11.8 per cent, or 14p, to 104.5p after it warned profits will fall by as much as 10 per cent this year.
The firm, which provides marketing services to legal firms, said a poor performance in its residential housing division would drag it down.
The homes arm connects people buying houses with surveyors and other services, and has suffered a slowdown.
It has also struck a £5million deal to exit a joint venture with National Law Partners.
The blue-chip index rose 0.5 per cent, or 41.11 points, to end at 7623.59, while the FTSE 250 added 0.8 per cent, or 169.05 points, to finish at 21,843.35. The London Stock Exchange will trade between 8am and 12.30pm today, before closing entirely on Christmas Day and Boxing Day.
The Footsie was given a lift from a slide in the value of the pound, which dropped 0.5pc against the dollar to $1.293.
Joe Healey, investment research analyst at The Share Centre, said optimism since the election had ‘quickly subsided as markets digested the inevitable formality that Brexit is not yet over’.
When the pound falls in value, Footsie-listed companies that make their profits in dollars stand to make even more money.
Among the few updates, Centamin announced after the market closed that it has requested an extension to a takeover deadline until January 14.
Canadian group Endeavour approached Centamin with a £1.5billion merger offer this month but only had until December 31 to make a final offer.
Both companies said they had not been able to delve into each other’s books enough to make a final decision.
Endeavour then asked Centamin to arrange an extension until the end of January, with Centamin compromising by giving Endeavour a two-week reprieve. Centamin rose 2.3 per cent, or 2.55p, to 114.2p, ahead of the update.
Domino’s Pizza disclosed that non-executive director Usman Nabi spent more than £6million scooping up shares in the pizza delivery firm last week. It lifted 0.1 per cent, or 0.2p, to 320.6p.
British Gas owner Centrica revealed plans to sell its gas turbine power station near King’s Lynn to German group RWE Generation for £105million, as part of a wider drive to simplify Centrica’s business. Shares rose 0.8 per cent, or 0.74p, to 89.9p.
But shopping centre landlord Intu Properties fell 2.2 per cent, or 0.75p, to 33p, after it sold Spain’s biggest mall to a Spanish investment group for £405million.
Construction contractors Balfour Beatty and Galliford Try made gains after they agreed a £32million settlement with a joint venture client, Transport Scotland, over claims connected to a bypass in Aberdeen.
Balfour Beatty added 1.8 per cent, or 4.6p, to close at 267.6p and Galliford Try gained 2.8 per cent, or 23.5p, to 863p.