London shares open higher, NY up Friday; Standard Chartered ahead on M&A UPDATE

London shares open higher, NY up Friday; Standard Chartered ahead on M&A UPDATE

	Published : Mon, 19 Nov 2007 10:17 By : Agencies Print this Story

(Updating with full details)

LONDON (Thomson Financial) - UK blue-chips were up early on aided by a rebound on in the US on Friday and with M&A lifting Standard Chartered and Friends Provident, while Northern Rock plummeted over 17 pct on news approaches are below its market capitalisation.

At 9.05, the FTSE 100 was up 14.1 points at 6305.3 and the FTSE 250 was 95.0 points higher at 10,861.2.

Volume was 247.5 mln shares in 72,275 trades.

On Wall St on Friday, the DJIA finished a volatile day up 66.74 points, or 0.51 percent, to 13,176.79.

Broader stock indicators also recovered in late trade. The Standard & Poor's 500 index rose 7.59, or 0.52 percent, to 1,458.74. The Nasdaq composite index rose 18.73, or 0.72 percent, to 2,637.24 after investors set aside some concerns about the banking sector and the health of the overall economy.

This morning in Asia, the picture was less rosy.

Japan's Nikkei closed down 112.05 points, or 0.7 pct, at 15,042.56 as comments about the state of the US housing market continued to unsettle investors.

The Hang Seng ended the morning down 241.60 points, or 0.9 pct, at 27,372.83.

Also in Asia, New York's main contract, light sweet crude for January delivery, was 66 cents higher at 94.50 usd. On Friday, the January contract settled up 1.77 usd at 93.84 usd per barrel.

The December contract expired Friday, closing 1.67 dollars higher at 95.10 dollars.

Back in London, Standard Chartered shares climbed 64 pence to 1,730 as the Financial Times reported that Temasek had rebuffed an approach by three Chinese banks to acquire its 17 per cent stake in Standard Chartered.

ABN Amro said the fact that Temasek has refused the offers suggests there is some possibility that these Chinese banks will over time build their stake in the open market with obvious positive implications for the share price.

Meanwhile, the Sunday Express said Friends Provident's days as an independent group are numbered as it is understood that insurance giants Zurich, Old Mutual and Axa are all preparing bids for the firm. Friends Provident shares added 3.5 to 160.0.

Following a trading statement this morning, Barratt Developments recouped some of its recent losses, adding 19-1/2 to 524.

Barratt said net average selling prices in the period to the end of October increased by 2 pct, despite average sales discounts running marginally higher than the same period last year, and it expects its operating margin for the half year to be 'broadly' in line with the guidance given at the preliminary results.

In reaction, Merrill Lynch repeated its 'buy' stance and 1,000 pence price target.

The broker said it believes at the very least, the stock deserves to eliminate its current valuation discount given the robustness of current trading and potential deal synergies from the Wilson Bowden acquisition.

Also on the upside was WPP Group, adding 9 to 597.

The advertising and marketing company confirmed this morning it has bought a 75 pct stake in Indian web agency Quasar Media Pte, as part of its strategy to develop its services in fast growing markets and strengthen its capabilities in digital media.

WPP said digital advertising is expected to become a 560 mln usd industry in India by 2009, representing almost 7 pct share of the total advertising market in the country.

Moving onto the Footsie fallers, Northern Rock remained in the spotlight, plummeting over 17 pct, or 22.7, to 109.9 after it said approaches from potential suitors it has received so far value the group 'materially below' its 559 mln stg market capitalisation at the end of last week.

Continued M&A talk surrounded BHP Billiton. It claimed shareholders were supportive of its proposed mining mega-merger with Rio Tinto, the Times newspaper reported, quoting BHP chief executive Marius Kloppers.

BHP shares fell 9 to 1,593 early on.

Among the midcaps, Gyrus Group soared a massive 57 pct or 230 to 630 following news Japan's Olympus Corporation has agreed a 630 pence/share offer for Gyrus, implying an enterprise value for Gyrus of about 1.026 bln stg.

The offer, which has been recommended by Gyrus' board, represents a premium of 58 pct to the closing price of 400 pence per Gyrus Share on Nov 16 -- the last business day before the announcement was made.

On the 250 downside, Burren Energy plummeted over 17 pct, or 210, to 678 after Italy's Eni SpA terminated its bid discussions with the UK group.

Finally, Tomkins were lower after Goldman Sachs downgraded the group to 'sell' from 'neutral' with a cut in target price to 175 pence from 210 pence following the credit crunch.

Tomkins shares were 1-1/2 lower at 187-1/2.

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