FTSE 100 movers: Glencore gains on Congo deal, Just Eat digests rival plans

Wed 13 Jun 2018

LONDON (SHARECAST) - (Sharecast News) - London's FTSE 100 index ended a touch higher on Wednesday, led by Glencore and a group of travel and leisure companies.

Glencore's was boosted as its Katanga subsidiary settled a legal dispute with its state-owned joint venture partner in Democratic Republic of the Congo that threatened to dissolve its DRC operating subsidiary Kamoto Copper Company. The dispute centred on a capital shortfall at KCC that led to its partner Gécamines seeking KCC's dissolution on 23 April.

Shore Capital analyst Yuen Low said: "The legal dispute with the shifty DRC mining parastatal Gécamines has been resolved. Or put it another way, Gécamines has succeeded in extorting significant debt reduction, relief of certain exploration obligations plus a significant sum of cash."

Not far behind on the leaderboard was phalanx of travel-related stocks, led by airline groups IAG and eastJet, cruise operator Carnival, and InterContinental Hotels. In amongst that, IAG shares broke out to their highest in 21 years.

Helping sentiment in the sector, London's Gatwick airport unveiled plans to spend £1.1bn on expanding its capacity by 7m passengers within the next five years. According to a statement by the airport, most of the money will go to lengthening one of the piers at the North Terminal to accommodate more aeroplanes.

A day earlier, easyJet said the expansion of Heathrow Airport would allow the entry of low cost carriers to the airport at scale for the first time, with new entrants launching flights to UK and European airports not currently served by Heathrow.

Hargreaves Lansdown also continued its recent strong run, setting a new all-time high as it broke through the £20 mark. Investors are ignoring such advice as was offered last week by analysts at Citi, who reiterated a 'sell' rating and £14.50 target price for a stock that is its "least favoured" in the sector, seen as "expensive" with a "challenging regulatory outlook, rising IT and other costs, intensifying competitive pressure".

On the downside, Just Eat shares fell as rival Deliveroo set out plans to expand in the UK by signing up 5,000 restaurants and takeaway outlets to its platform this year with a new 'Marketplace+' feature analysts said was a direct 'copy' of the Just Eat model. To be fair to Deliveroo, which hitherto has offered its 15,000 bike couriers to restaurants with no delivery option of their own, Just Eat began to offer courier delivery options itself earlier this year.

Goldman Sachs said Deliveroo's plan was "a competitive threat", but pointed to "the very low levels of customer churn that takeaway platform operators consistently point to across the various companies we cover, which would suggest Deliveroo's move could be more of a threat to future growth, than the existing customer base".

Market Movers

FTSE 100 (UKX) 7,710.89 0.09%
FTSE 250 (MCX) 21,232.30 -0.04%
techMARK (TASX) 3,554.21 0.10%

FTSE 100 - Risers

Glencore (GLEN) 397.90p 3.73%
Hargreaves Lansdown (HL.) 2,060.00p 2.23%
International Consolidated Airlines Group SA (CDI) (IAG) 713.60p 2.03%
easyJet (EZJ) 1,785.00p 1.85%
Carnival (CCL) 4,708.00p 1.57%
Old Mutual (OML) 226.00p 1.57%
Evraz (EVR) 560.00p 1.49%
Burberry Group (BRBY) 2,136.00p 1.42%
Sage Group (SGE) 684.00p 1.39%
InterContinental Hotels Group (IHG) 4,961.00p 1.24%

FTSE 100 - Fallers

Just Eat (JE.) 809.40p -4.78%
Standard Chartered (STAN) 724.00p -1.74%
Vodafone Group (VOD) 185.50p -1.59%
Sky (SKY) 1,336.50p -1.58%
DCC (DCC) 7,185.00p -1.37%
Royal Bank of Scotland Group (RBS) 262.50p -1.20%
Rolls-Royce Holdings (RR.) 831.80p -1.14%
Direct Line Insurance Group (DLG) 351.20p -1.13%
WPP (WPP) 1,234.50p -0.96%
Kingfisher (KGF) 309.80p -0.96%
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