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MARKET REPORT: Takeover frenzy propels mid-caps to all-time high


MARKET REPORT: FTSE 250 hits record high and FTSE 100 closes above 7100 for first time in 15 months as markets enjoy sparkling end to week

The FTSE 250 hit a record high and the FTSE 100 closed above 7100 for the first time in 15 months as markets enjoyed a sparkling end to the week. 

The mid-cap index shot up 1.3 per cent, or 283.92 points, to 22775.28 as takeover news lit a fire under aerospace group Meggitt and St Modwen Properties shares. 

And the Footsie was propelled by a metals rally that lifted the index’s miners. 

It closed up 0.8 per cent, or 53.54 points, at 7129.71 – the first time it finished above 7100 since markets went into a Covid-induced free fall in February 2020. 

Anglo American (up 3.6 per cent, or 116p, to 3381.5p), Glencore (up 3.4 per cent, or 10.45p, to 322.75p) and BHP (up 1 per cent, or 23.5p, to 2,337.5p) made gains as iron and copper prices both hit record highs – of $200 a ton and $10,123 respectively. 

Demand for raw materials has soared as governments have reversed pandemic prudence, planning huge infrastructure spending to stimulate the global economy. A worldwide push to go green has driven up the prices of metals needed in environmental technologies, which includes copper. The prospect of a buoyant recovery was reinforced by data from China, which showed exports rose by around a third in April compared with the same month a year before, far outpacing estimates. 

The optimism even outweighed surprisingly downbeat US jobs data – which showed a surprising slowdown in hiring last month. 

While the commodities boom lifted the Footsie, the FTSE 250 saw a takeover frenzy take hold for the second day in a row as Meggitt rose 8.3 per cent, or 38.1p, at 498.1p and St Modwen jumped 20 per cent, or 89.5p, to 537p. KKR is in early talks to buy another midcap group, John Laing. 

No price has yet been revealed – but brokers at Liberum said it could get an offer for about 384p per share. John Laing closed lower, however, falling 4.2 per cent, or 15.8p, to 364p, having risen 20 per cent in the previous session when the approach was made public. 

Even before the Government revealed its 12-strong ‘green’ list of countries that Britons could travel to, travel stocks were flying high. Easyjet rose 5.6 per cent, or 58.5p, to 1095p, Tui by 4 per cent, or 17.1p, to 448.2p, and British Airways-owner IAG by 3 per cent, or 6.2p, to 213.2p as UK holidaymakers sat poised to book their summer holidays. 

Footsie-listed Intercontinental Hotels advanced 1.4 per cent, or 72p, to 5116p despite reporting a 34 per cent drop in the revenue it made per room – a key industry metric – in the first quarter. 

But investors were reassured by the jump in bookings the Holiday Inn and Crowne Plaza-owner saw in greater China and the US. The rollout of vaccines and gradual removal of travel restrictions has set it up for a better summer. 

Elsewhere, Rolls-Royce is reportedly looking for new buyers for its Bergen Engines business after the Norwegian government vetoed its sale to a Russian firm. 

Bergen makes engines and technology for boats, including for Norway’s navy. 

Rolls has invited bids for the unit before the end of the month, Sky News reported after the market close. Shares rose 3.2 per cent, or 3.34p, to 106.74p. 

And London-based broker Numis reported record results as it laid out plans to target European clients who might have been cut off by Brexit with a new hub in Dublin. The barrage of floats over the six months to the end of March helped revenues surge by almost two-thirds to £115m. 

Profits increased more than fivefold to £39m. Numis said it was also seeing an uptick in deal-making – underscored by the fact it is advising St Modwen on the takeover discussions announced yesterday. Shares rose 1.8 per cent, or 7p, to 398p.



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