Shell shares hit three-year peak after oil breaches the $60 mark
OIL prices surged above $60 a barrel for the first time in two years yesterday, pushing Royal Dutch
Shell B shares to their highest price since Opec refused to cut production three years ago.
The price of the benchmark Brent crude hit a high of $60.53, primarily driven by currency markets as the dollar weakened on consumer spending data and news that President Donald Trump was leaning towards Jerome Powell as the next chief of the US Federal Reserve.
Shares in Shell closed up 26p at £23.86, their highest price since the oil producers’ cartel Opec announced in November 2014 that it would leave oil production quotas unchanged, sending crude prices plummeting.
Elsewhere, global technology company Laird saw its shares rise 6.5p to 158.8p after it continued to claw its way back to health.
Only eight months ago the company was forced to launch a £185m rights issue to get its debt under control amid booming losses.
Its shares had almost halved this time last year after it said it was experiencing delayed demand from Apple, its largest customer, triggering a profit warning.
But it said yesterday that it expected full-year profits for 2017 to be towards the top end of current financial forecasts, while revenues had grown by 19pc to £245m, thanks to cost-cutting this year.
Numis lifted its price target on Laird to 180p from 165p following the update, and a note from Berenberg suggested that “the market has overlooked this restructuring story for too long”, as it praised its improving track record.
Meanwhile, global consumer goods company
Reckitt Benckiser was lifted 205p to £68.45 on the back of a note from Andrew Wood at Bernstein, which suggests that the firm’s announcement last week about separating its homecare and health businesses means that a potential break-up, sale or spin-off of assets is now an “important consideration”.
Reckitt said that it would separate off its core consumer health business, which includes Durex condoms and Nurofen painkillers, from its home division, which makes Cillit Bang cleaning products, among other things.
Mr Wood repeated speculation that the move could pave the way for a potential sale of the homecare arm, allowing the firm to unlock value and reverse a slowdown seen in recent months.
Elementis, the mid-cap chemicals group, shot up as much as 13.6p to 293.8p before closing the day up 6.2p at 286.4p on the back of a strong trading update.
It said it was on track to grow profits across all three of its divisions, and was progressing with the sale of its surfactants business. Support services group
Compass also enjoyed a second day of gains, advancing 38p to £16.38, thanks to an upgrade from RBC Capital Markets.
The bank’s analysts said that the stock provided investors with a rare combination of organic growth, improving margins and strong return of capital.
Compass investors were rewarded earlier this year when the company paid out £1bn in special dividends.