Shares in Prudential were in demand yesterday after a takeover in the Far East served to underline the value of its growing business in the region.
The insurer rallied 30p to 608p after Axa, its French rival, and AMP, of Australia, had a A$11 billion (£6 billion) bid rejected for Axa’s AsianPacific business. Tony Silverman, an analyst at S&P, said that this reflected favourably on the value of the Pru, which he thinks has a betterpositioned business in Asia. Using the same valuation as the Axa deal, Mr Silverman said that Prudential would be worth 850p a share.
Prudential, with the rest of the insurance sector, was also given a boost from results from Allianz, its German peer, that were better than expected and a note from ING, which recommended buying stocks that were building businesses in emerging markets. Legal & General, which received approval to start a business in India, rose 3.45p to 83¼p and Aviva gained 11.6p to close at 404.7p.
The FTSE 100 advanced 92.46 points to 5,235.18, hitting its highest level for more than two weeks, amid gains for commodity stocks and financials. The mining sector was buoyed, too, as a weaker US dollar pushed up metal prices. Kazakhmys rose 73p to £12.86 after copper rallied amid hopes of stronger demand. Xstrata rose 48½p to £10.11.
BP climbed 11.3p to 595.2p and Royal Dutch Shell ticked up 41½p to £18.49 as the price of a barrel of oil edged towards $80 because of concerns that Tropical Storm Ida could hit production in the Gulf of Mexico.
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Royal Bank of Scotland was the biggest gainer, closing 2.33p up at 39.395p, with the stock picking up where it had left off on Friday, after figures showed fewer bad debts. Barclays rose 6.35p to 342.85p and HSBC was up 8.9p to 692.2p ahead of trading updates today.
Inmarsat, the satellite group, was another big riser, ending the day up 26½p at 621p, after upbeat third-quarter results.
There were only three blue-chip fallers, of which Cable & Wireless was the worst hit, sliding 2.2p to 136.8p amid concerns that it may not be able to cover its dividend. G4S fell 2.9p to 249.9p after the security group’s third-quarter figures underlined some analysts’ concerns about slowing organic growth. Next eased 8p to £19.67 as investors took profits after the retailer’s recent good run.
Game Group rose 3.8p to 157.8p after Seymour Pierce reiterated its “buy” rating on the stock ahead of today’s launch of Modern Warfare, which is set to be the biggest computer game launch of all time. The broker also said that Game was a target for GameStop, an American rival.
Centamin Egypt was up 4¾p at 142¾p after an upbeat note from Ambrian, which has raised its price target to 171p following a recent encouraging site visit and the stock’s move to the main list from AIM.
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Morgan Crucible rose 1½p to 162½p despite KBC Peel Hunt saying that the group could be the next in line to hold a rights issue. It said that a £115 million fundraising would extinguish balance sheet concerns.
? New York: Stocks jumped to highs for the year as the dollar extended its slide, boosting prices for commodities including gold and oil. At the close the Dow Jones industrial average was up 203.52 points at 10,226.94.