Royal Mail IPO, opened 450, trading 440
Shares in Royal Mail rose more than 38% to 456p at the start of conditional dealings on the London Stock Exchange this morning. The stock opened at 450p a share, over £1 higher than the initial 330p price given during the IPO. The hugely oversubscribed sale valued the 500 year-old-company at £3.3 billion.
The floatation itself means the government’s stake in the Royal Mail is reduced down to 38% with the possibility of a further reduction to 30% through an over-allocation option. The price rise is likely to fuel debate over whether the sale of Royal Mail has been undervalued whilst business Secretary Vince Cable has insisted that the taxpayer has not been short-changed by the privatisation.
Anglo American, +2.2%
Leading the FTSE 100 risers, Anglo American shares traded over 2 percent higher after announcing the resolution of the strike action. The striking miners have stated returning to work after it clinched a deal with a South African union to end a near two-week strike over job cuts. AAL.L said in a statement it would grant “voluntary separation” packages to 3,300 employees it had decided to lay off.
Citigroup upgrades Whitbread to buy from neutral and raises target price to 3570p from 2900p. The upgrade comes after “Improved sentiment around the European economies suggests that we could be at the start of a renewed upgrade cycle for European focused hotel names,” Citi says. They also stated Whitbread are best exposed to any recovery in European trading. Whitbread generates over 90% of EBIT from the UK which has seen the most aggressive upgrades to economic forecasts.
XP Power, +10%
The global computing-component production company, XP Power Limited announced Friday that due to a positive trading environment in its third quarter it has increased revenues 11% year on year for the three months ended September 30. They also announced that sales were boosted 7% for the nine months ended September 30 compared to the same period in 2012.
Chemring Group, -24%
British military equipment maker Chemring Group warned that would take an 8 million pound hit to 2013 operating profit from continuing production and quality problems, and that it saw 2014 performance behind this year’s. The hit was due to production issues at its Kilgore facility and movement in dollar-pound exchange rate would adversely affect its bottom line.
Kenmare Resources, -10%
The explorer for commercial deposits of natural resources company has announced it had raised £66.33 million by placing 250 million new shares at 25.6 pence each. Each subscriber to the new shares will also get one warrant for each five shares bought. The warrants have an exercise price of 29.09 pence and can be exercised after 13 months, but expire in five years.