DJ MARKET COMMENT: London Stocks Higher; Oil Firms Strong
Commodity-sector movers included oil producers Cairn Energy, up 3.1%, and Royal Dutch Shell, up 2.5%. Gas company BG Group rose 3.9% and miners Anglo American and BHP Billiton climbed more than 2%. Supporting the sector were metals and oil prices. The July dated copper contract rose $3.55 at $335.90, while the light sweet crude contract tacked on 31 cents at $66.29 a barrel.
Lonmin shares were helped by an upgrade to buy from neutral at Merrill Lynch. Shares advanced 2.6%.
On the sector overall, John Meyer at Numis said: "Mining equities, particularly for the small and mid-cap companies, could continue to perform well as metals prices move towards longer term price average forecasts."
The FTSE 100 index rose 0.4%, or 24.90 points, to 6,665.80 after a hitting another high in the session. The index climbed to 6,666.90 in the morning, a level not seen since September 2000. Other European indexes were also higher.
Mitchells & Butlers
Pub and restaurant owner Mitchells & Butlerssaid it's considering forming a joint venture for its property assets.
The firm said it has approached a number of third parties and that negotiations are proceeding with R20, the investment vehicle of property tycoon Robert Tchenguiz.
Analysts at Merrill Lynch said that a joint venture could give the company a way to lock in the current high value of pubs.
"M&B recently had its securitized estate valued at GBP4.8 billion, giving a total estate value of around GBP5.5 billion. Assuming the capital raised is returned to shareholders, the mooted JV could be a way of locking in the current high value of pubs," the broker said.
Mitchells & Butlers shares turned back from early strong gains to trade down 2.1% as some analysts expressed doubt about the wisdom of such a move.
"Such a deal would fundamentally change the successful business model employed since demerger from Six Continents," analysts at Numis Securities said. They argued that they still believe the best way to capitalize on demand for leisure property assets is through Punch Taverns and Whitbread.
Punch Taverns shares rose 0.9%, while Whitbread shares inched 0.2% higher.
Shire, Elan in focus
Pharmaceutical Shire said that it's "evaluating its options" for SPD465, an investigational oral stimulant designed to treat ADHD in adults for up to 16 hours with one daily dose.
The Food and Drug Administration gave it an "approvable letter" for the drug - which means the regulator wants certain answers or studies before it approves the drug. Shire didn't identify the FDA concerns. Shares turned back from early gains to trade flat.
Outside the top index, shares in Irish drug maker Elan rose 12.5% after the company said it intends to progress a drug designed to treat Alzheimer's disease to phase three trials.
And shares in datacenter services group IX Europe rose by 6.8% to 124 pence after it announced it has received a number of preliminary offer approaches.
On the downside, soft drinks maker Britvic dipped 2.2% after it said that it's expecting stronger comparatives in the second half of its fiscal year.
The company's first-half profit after tax rose 67.7% to GBP10.9 million. Branded revenue rose 9.3% at GBP363.6 million, following brand strength in still drinks and sustained activity in carbonate drinks.
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