FTSE 100 movers: Anglo surges on report Brazil business sale process underway

The FTSE 100 continued to bounce around on Monday, with the market up 6.36 points (0.11%) to 5,918.80 points by mid-afternoon.

On a day of lacklustre metals trading, with key commodities down halfway through the afternoon session, investors took to heart news that Anglo American is poised to begin the sale of its Brazilian niobium and phosphate business. City AM reported on Monday that the $1bn (£680m) sale, which was announced last year, will be run by Goldman Sachs and Morgan Stanley in a bid to bolster its balance sheet.

BAE Systems flew higher after JP Morgan Cazenove said it believes 2016 will be a big year for defence stocks and upgraded the company from ‘neutral’ to ‘overweight’.

The investment bank on Monday cited a major escalation in geo-political tensions as a reason why it will be a good year for the sector, as well as it being a “safe haven” as concerns grow about the global economy. It said there were four key positives for the sector, including the rise in US and European defence spending due to the Middle East, the related refugee crisis and Russia’s foreign policy when it comes to Ukraine and Syria. JP Morgan Cazenove also said the stronger US dollar is a positive to UK defence companies.

Another broker note also lifted software supplier Sage’s share price. Bank of America Merrill Lynch upgraded the stock to ‘buy’ from ‘underperform’ and lifted the price target to 660p from 400p.

“We think CEO Kelly is building a better business than he inherited – through investment in product and go to market – and Sage will deliver high single digit growth, margin gains and accretive M&A to drive strong shareholder returns.” The bank changed its historically bearish view on the stock for a number of reasons.

He said Kelly’s team has recognised and begun to address several issues such as the lack of investment in public cloud and a fragmented organisational structure. In addition, Merrill said pure-play cloud vendors such as Xero have failed to gain significant market share and meet growth expectations. The bank also pointed to a £16bn green-field opportunity in cloud.

Sports Direct International was keeping the market relatively balanced, following a report in The Times on Saturday that the company’s founder Mike Ashley is being sued.

It is alleged he offered an investment banker £15m to get the company off the City’s “blacklist” and double its share price within three years. According to claims made in a court document seen by the paper, Ashley agreed after a few drinks at a pub to “incentivise” former Merrill Lynch banker Jeff Blue to repair the company’s relationship with the City. However Blue only received a £1m payment for what Ashley claimed was for helping get investors to approve his inclusion in a controversial Sports Direct staff share scheme.

Shire also featured in the fallers after the London-listed pharmaceuticals company announced the purchase of US-based Baxalta for $32bn, provoking a mixed reaction from traders.

Shire would pay $18 in cash and 0.1482 Shire ADS for each of its rival’s shares, implying a price of $45.57 per share of Baxalta, above a previous bid of $45.23. The price was equivalent to a premium of 37.5% over the price of Baxalta stock on 3 August, the day before Shire made its initial bid public. Shares initially rose on the news but very quickly tanked soon after.

FTSE 100 - Risers

Anglo American (AAL) 242.00p 5.58%
BAE Systems (BA.) 534.50p 2.89%
Glencore (GLEN) 79.39p 2.47%
Sage Group (SGE) 591.00p 2.34%
Whitbread (WTB) 4,206.00p 2.09%
BP (BP.) 334.85p 1.87%
Intertek Group (ITRK) 2,704.00p 1.73%
Land Securities Group (LAND) 1,135.00p 1.52%
Aberdeen Asset Management (ADN) 252.90p 1.44%
Old Mutual (OML) 158.10p 1.41%

FTSE 100 - Fallers

Sports Direct International (SPD) 413.70p -4.52%
Shire Plc (SHP) 4,154.00p -2.88%
Marks & Spencer Group (MKS) 424.70p -1.39%
Johnson Matthey (JMAT) 2,489.00p -1.23%
Hargreaves Lansdown (HL.) 1,361.00p -1.16%
BG Group (BG.) 929.70p -1.10%
Royal Bank of Scotland Group (RBS) 280.80p -0.95%
Smith & Nephew (SN.) 1,145.00p -0.87%
WPP (WPP) 1,452.00p -0.82%
GlaxoSmithKline (GSK) 1,361.00p -0.77%