More deals, predicts Xstrata boss

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The London market is up on bad purchasing managers index numbers and weak house price data. These have fuelled hopes of a rate cut from the Bank of England tomorrow. At lunchtime the FTSE 100 was up 77 points, or 1.2 per cent, at 6,393.

The economic picture emerging from companies today, though, is more mixed. We have a profit warning from Moss Bros, which said that in the last seven weeks sales had “literally fallen off a cliff”. But we also have Asos, the online fashion retailer, reporting increased interim profits and a sales increase in recent weeks of more than 100 per cent.

Shaftesbury, the property company operating in London’s West End, saw good growth in rental values and IG Group, the spread betting business, is loving the market volatility. Revenue for the six months to the end of November would be some 53 per cent up at £85m, it said.

On the other hand, some hits have rather overshadowed a strong trading performance at Standard Chartered. It is taking a $46m write-down on SIV assets. The bank also seems to have had some problem with its Korean mortgage hedges. And there has been a regulatory delay to the sale of its Indian asset management business.

Finally, we have a bit more deal-making among the miners, albeit on a small scale. Xstrata Coal, the commodities arm of the Swiss-based mining group, has made an unsolicited A$960m cash offer for Resource Pacific, trumping a rival bid for the Australian coal miner from New Hope Corporation.

More interesting are Xstrata chief executive Mick Davis’s remarks on the BHP-Rio bid: ”Whether that transaction goes through or not time will tell,” he said at an investor seminar this morning. ”It certainly has, I think, created another new dynamic and momentum for consolidation in the industry.” Does that mean a deal with Anglo American? See FT Alphaville.

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