FTSE 100 movers: Reports Rolls-Royce reps to meet major shareholder

The FTSE 100 started the week in the green, up 14.06 points (0.23%) to 6,252.35 by mid-afternoon Monday.

Rolls-Royce Holdings led the charge after a report from Sky News that senior representatives of American fund ValueAct will meet the president of Rolls-Royce's aerospace division Tony Wood. The fund has become the company’s biggest shareholder and it marks the first formal talks about its plans to revive the struggling manufacturer. Sky News said that neither Rolls-Royce chief executive Warren East nor chairman Ian Davis would be in Derby for the meeting, although it was unclear whether either of them would meet ValueAct in London.

Associated British Foods also performed well after both RBC Capital and Nomura reiterated their respective ‘sector perform’ and ‘neutral’ ratings for the company. The Primark owner reaffirmed its guidance for the 2016 financial year on Friday, saying currency pressures will likely lead to a modest decline in adjusted operating profit and earnings. In a statement at the company’s annual general meeting, chairman Charles Sinclair said the good underlying trading achieved last year has continued into the new financial year which has started well. He said investment in expansion opportunities will continue across the group, with greater stability expected in sugar profit ahead of EU quota removal in 2017.

Both Hammerson and Land Securities Group benefited from a note from Deutsche Bank re-evaluating the real estate sector. The investment bank said in its industry update on Monday that the sector is close to high cycle conditions. “We believe we are close to high cycle conditions in London office given yields are at all time lows and rents are nearing all time highs,” it said. “We think London office rental growth will continue given strong tenant demand and limited near term supply.” However it also turned cautious on medium term office due to a number of risks including visibility on supply for 2018 onwards driven by high development activity, as well as new outer London hubs. Land Securities was upgraded from ‘hold’ to ‘buy’ while Hammerson was a top pick for its earnings growth and optionality on market rental growth.

Royal Dutch Shell was the market’s biggest faller after oil prices fell in a bearish market. WTI Crude was down 2.78% to $38.86, while Brent was down 2.09% to $42.10. That also brought down BG Group, which is one step away from receiving all the regulatory clearances it needs for its takeover by Shell, as well as BP.

FTSE 100 - Risers

Rolls-Royce Holdings (RR.) 612.00p 2.94%
Associated British Foods (ABF) 3,562.00p 2.21%
Hammerson (HMSO) 615.00p 2.16%
Merlin Entertainments (MERL) 437.60p 2.08%
TUI AG Reg Shs (DI) (TUI) 1,159.00p 1.93%
Unilever (ULVR) 2,845.00p 1.86%
Land Securities Group (LAND) 1,228.00p 1.82%
RSA Insurance Group (RSA) 444.60p 1.81%
Carnival (CCL) 3,510.00p 1.77%
ITV (ITV) 272.60p 1.75%

FTSE 100 - Fallers

Royal Dutch Shell 'B' (RDSB) 1,545.00p -3.41%
Royal Dutch Shell 'A' (RDSA) 1,536.00p -3.12%
BG Group (BG.) 994.70p -2.96%
BP (BP.) 350.50p -2.56%
Kingfisher (KGF) 346.70p -1.90%
Tesco (TSCO) 159.75p -1.75%
BHP Billiton (BLT) 777.00p -1.36%
Randgold Resources Ltd. (RRS) 4,234.00p -1.28%
Centrica (CNA) 209.10p -1.09%
Morrison (Wm) Supermarkets (MRW) 146.00p -1.08%