BP rises after reports of UAE bid for energy giant
With crude prices near record highs and the dollar rising, the oil majors were always going to find support.
But investors were perhaps hoping for a bit more of a ride on BP after news reports suggested that Abu Dhabi National Oil Company (ADNOC) had recently considered buying the energy giant.
the sources quoted said the United Arab Emirates’ state-owned oil firm’s deliberations did not go beyond the preliminary stage, however, so that accounted for the less than euphoric response.
Apparently, the plans stalled after ADNOC determined that BP was not the ‘right fit’ for the company – although politics were also likely to be a factor, given the tensions in the Middle East.
But the fact that ADNOC was even considering a £90bn full-bid or taking a large stake in the firm could ring alarm bells in the City.
BP, which reported profits of more than £11bn last year, is the lowest valued global oil major measured by market capitalisation versus cash flow.
BP shares gained 3.7pc, or 19.1p, to 539.1p. Rival oil major Shell rose 2.8pc, or 80p, to 2937p.
Miners dominated the blue-chip leader’s board, reflecting buoyant metal prices – not least the unstoppable rise of gold to record highs.
Fresnillo, which mines the yellow metal, stood out, adding 7.6pc, or 44p, to 622.5p and Chilean copper giant Antofagasta took on 2.2pc, or 48p, to 2266p. Strength in commodity issues drove the FTSE 100 up 0.9pc, or 71.78 points, to 7995.58. the FTSE 250 index lost 0.3pc, or 65.63 points to 19721.24.
Not all commodity- related stocks were in the green. Petrofac plunged 20.5pc, or 6.82p, to 26.5p after the infrastructure services provider to the energy sector updated shareholders on its ongoing strategic and financial restructuring efforts. the company said it ‘continues to face challenges’ in securing new performance guarantees but added that discussions were continuing.
housebuilders were in demand after analysts at JP Morgan highlighted the opportunities for recovery in the sector around the looming general election, with housing expected to be a key focus for all political parties.
the US bank’s analysts upgraded ratings for a few housebuilders to ‘overweight’, including blue-chips Taylor Wimpey ( up 3.3pc, or 4.35p, to 134.6p) and Persimmon (up 1.3pc, or 16.5p, to 1282p).
But airline issues were the top FtSE 100 fallers, with EasyJet down 4.3pc, or 23.4p, to 527p and British Airways owner IAG shed 3.8pc, or 6.45p, at 162.65p, weighed by increased fuel costs and concerns over escalating Middle East tensions.
A big faller among the small cap stocks was Bermuda-based nonlife specialty insurer R&Q. it dropped 45.4pc, or 2.49p, to 3p after it warned of a significant annual pre-tax loss due to higher costs on the sale of a business unit.
Bens Creek, which owns metallurgical coal mines in North America, shed 32.4pc, or 0.28p, to 0.58p on news it laid off 44 workers in West Virginia due to depressed prices and financial constraints.