FTSE 100 movers: Banks bury miners in afternoon trading
The FTSE 100 was trading in the red on Thursday afternoon, as the Federal Reserve’s hawkish policy meeting minutes overshadowed a better-than-expected UK retail sales report.
Private equity company 3i Group was among the top risers, after its board brought the good news to investors early in the morning with a positive dividend increase and an improved dividend policy.
The cheery news came after the firm delivered a total return of 22% and lifted net asset value per share by 17% in the year to 31 March.
As the shares rocketed to their highest point in the year-to-date, 3i proposed a final dividend of 16p per share to lift the total dividend by 10% to 22p per share.
It also revised its current approach of distributing 15-20% of cash realisation proceeds to 16% this year, with an additional final dividend each year taking account of cash realisations, the investment pipeline and the balance sheet at year end.
Banks were a standout on the benchmark during the afternoon - Royal Bank of Scotland, Barclays and Lloyds Banking Group all featured highly.
Investors were clearly buoyed by the prospect of interest rates rising across the pond, after minutes from the Federal Reserve’s April meeting overnight suggested policymakers were looking at a June hike.
Another riser was motor insurance company Admiral Group, which continued its trajectory of recovery after having the steam sucked out of it earlier in the week in a note from Macquarie.
Analysts there reiterated their rating for Admiral at ‘underperform’ on Tuesday, and set a target price of 1510p on the stock, indicating a potential downside of 19.9% on the stock.
Housebuilder Berkeley Group, which - like others in the sector - had come under pressure recently as the risk of Brexit weighed on the firm’s prospects, was ticking along nicely among the risers.
It came after the latest poll on Britain leaving the EU - an Ipsos MORI poll for the Evening Standard - showed the Remain camp surging ahead, with 55% of respondents wanting the UK to stay in the union.
The referendum is on 23 June.
On the downside, miners made up the bulk with Anglo American, Antofagasta, BHP Billiton, Fresnillo, Glencore and Rio Tinto all bunched at the bottom.
A stronger dollar - another outcome of the Fed minutes - put pressure on the demand side of metals prices, with buyers now finding it more expensive to pay with other currencies.
Energy giant Royal Dutch Shell was under pressure as well, having been the subject of a stern talking to by analysts at Charles Stanley.
In a report, analyst Tony Shepard said the integrated oil company’s ability to ring up cash for shareholders was “extremely weak”, giving him cause for concern given Shell’s levels of net debt and gearing were “much higher than anticipated”.
FTSE 100 - Risers
3i Group (III) 504.50p 3.49%
Royal Bank of Scotland Group (RBS) 229.00p 2.37%
Berkeley Group Holdings (The) (BKG) 3,117.00p 1.90%
Barclays (BARC) 173.60p 1.88%
RSA Insurance Group (RSA) 485.50p 1.40%
ITV (ITV) 208.20p 1.31%
Admiral Group (ADM) 1,885.00p 1.24%
Taylor Wimpey (TW.) 198.80p 1.17%
Barratt Developments (BDEV) 561.50p 0.99%
Standard Chartered (STAN) 525.10p 0.98%
FTSE 100 - Fallers
Fresnillo (FRES) 1,073.00p -6.21%
Anglo American (AAL) 574.40p -5.23%
Randgold Resources Ltd. (RRS) 5,915.00p -5.21%
Royal Dutch Shell 'A' (RDSA) 1,658.00p -4.33%
Royal Dutch Shell 'B' (RDSB) 1,671.00p -4.02%
Merlin Entertainments (MERL) 415.40p -3.71%
BHP Billiton (BLT) 812.30p -3.69%
Provident Financial (PFG) 2,765.00p -3.66%
Rio Tinto (RIO) 1,921.00p -3.64%
Glencore (GLEN) 128.65p -3.23%