FTSE 100 movers: Royal Dutch Shell and BG Group on the rise after takeover approved

The FTSE 100 resurfaced into the black after sinking into the red before lunch, with the blue chip market up 8.45 points (0.14%) to 5,998.82 by early-afternoon on Thursday.

Anglo American surged to the top of the market as investors welcomed its fourth quarter production report. Output for the three months rose 3% from the end of 2014 and the third quarter, while output for the year as a whole was up 5%.

Copper production from the group’s retained operations in the three months ended 31 December rose 23% to 181,400 tonnes thanks to higher grades, throughput and metal recoveries. Nickel production increased 57% to 10,500 tonnes following the successful completion of the planned Barro Alto furnace rebuilds. Meanwhile, Minas-Rio saw a more than four-fold increase in iron ore production to 3.3m tonnes, which reflected the ongoing ramp-up of the operation.

On the downside, however, iron ore production at Anglo’s Kumba project slumped 12% to 10.9m, reflecting operational changes at Sishen to move to a lower cost mine configuration. Although this was weaker compared to the same quarter in 2014, it was above RBC Capital Markets’ estimate of 10.4m tonnes.

Royal Dutch Shell and BG Group also featured in the top movers as oil prices rose, as well as BG Group shareholders approving its £35bn takeover by Shell in the afternoon. 99% of shareholders approved the deal, which is expected to be completed on 15 February, subject to the satisfaction or waiver of certain customary conditions.

It followed 83% of Royal Dutch Shell shareholders voting on Wednesday to go ahead with the deal, which will create the world’s largest liquefield natural gas trader. Shell chief executive officer Ben van Beurden said yesterday: “I am delighted with the positive shareholder vote and the confidence that shareholders have shown in the strategic logic of the combination of Shell and BG. Our immediate focus is on the successful completion of the transaction."

Centrica shares slid after Societe Generale downgraded the stock to ‘sell’ from ‘hold’. The downgrade came as the bank updated its commodity price assumptions to reflect the current forward curves, resulting in a 19% cut to its 2016 adjusted basic earnings per share forecast to 14.3p.

“Our target price is reduced to 175p (previously 250p), which despite the 5.8% dividend yield, results in a prospective -10% total shareholder return – prompting us to downgrade the share.” SocGen also cut its 2015 estimate to 17.1p from 18.1p despite Centrica’s strong nuclear and oil and gas output, due to the negative impact of the mild December weather on gas volumes. The bank estimated the improvement to the balance sheet capacity from the dividend per share cut and the one notch rating downgrade has been eroded by lower commodity prices.

FTSE 100 - Risers

Anglo American (AAL) 291.65p 14.94%
BHP Billiton (BLT) 703.20p 4.97%
Royal Dutch Shell 'B' (RDSB) 1,533.50p 4.89%
Royal Dutch Shell 'A' (RDSA) 1,531.50p 4.68%
Antofagasta (ANTO) 392.10p 4.45%
BP (BP.) 376.90p 3.86%
Tesco (TSCO) 167.00p 3.73%
BG Group (BG.) 1,061.50p 3.11%
Old Mutual (OML) 164.20p 2.82%
Glencore (GLEN) 94.61p 2.80%

FTSE 100 - Fallers

Ashtead Group (AHT) 915.00p -5.18%
Centrica (CNA) 203.30p -3.24%
International Consolidated Airlines Group SA (CDI) (IAG) 538.00p -2.62%
CRH (CRH) 1,817.00p -2.57%
Vodafone Group (VOD) 218.00p -2.33%
Carnival (CCL) 3,541.00p -2.07%
ARM Holdings (ARM) 975.50p -2.01%
Shire Plc (SHP) 3,977.00p -1.80%
Smith & Nephew (SN.) 1,143.00p -1.72%
easyJet (EZJ) 1,548.00p -1.59%