Investec shares surge on its plans to spin off asset management
INVESTEC is planning to spin off its asset management business to give the £109bn funds arm its “own wings”.
The South African bank and asset management firm made the decision after a seven-month strategic review and will push ahead with the demerger following a management shake-up.
Boss Stephen Koseff, who will leave after 40 years in October, said to Bloomberg TV that it was “time to give it its own wings and let it fly”. The arm has a “very different client base” to the rest of business, he said.
The spin-off sparked speculation that it could be swept up in a wave of consolidation deals in the sector. The industry has been under pressure from the rising popularity of passive funds, tightening regulation and sinking fees. Scale has been seen as key to surviving the sector slump, creating asset management giants, such as Standard Life Aberdeen and Janus Henderson.
A separate listing for the asset management arm will give it “an opportunity to play as a consolidator” but it has traditionally grown organically, Mr Koseff said.
Investors cheered the spin-off proposal, boosting Investec shares 40.5p to 525.2p, a 8.4pc surge.
Elsewhere, Rolls-royce shares climbed after it played down concerns that problems with its Trent 1000 jet engines could be more widespread than thought. On Wednesday an Airbus A350 jet made an emergency landing after an engine shutdown, prompting fears its XWB jets could be afflicted by the same cracking problems, a concern that caused Rolls shares to dive.
Shares rebounded 26.2p to 981.2p after the company said initial analysis indicated the problem was with an engine control computer. “Inspections of the engine core show no signs of damage and confirm there is no connection between this event and Trent 1000 in service issues,” a Rolls spokesman said.
Investors dialled into BT after Berenberg predicted that the telecoms giant could rise to become a “Brexit phoenix”. Lifting its price target for the FTSE 100 firm 10p to 170p, the German bank argued that BT’S exposure to the UK has hit its shares but added that a soft Brexit would become a positive.
Chinese authorities giving Japanese firm Takeda’s takeover of Shire the green light helped the FTSE 100 pharma giant advance 96.5p to £44.87. Costa Coffee owner
Whitbread gained 46p to £46.85 after Jpmorgan upgraded the company to “overweight”, arguing its Premier Inn business would improve once the coffee shop chain is sold. Persistent speculation linking US drinks giants Pepsi and Coke with a move for
Fever-tree Drinks pushed it 69p higher to £38.63. Debt collector Arrow Global jumped 21p to 237p after snapping up Europa Investimenti.
Calm descended on markets on the eve of the Lehman Brothers collapse anniversary as hopes of progress in Us-china trade talks and intervention to stem crises in Russia and Turkey lifted the mood. The
FTSE 100 climbed 22.46 points to 7,304.04 after Beijing welcomed the White House’s invitation for a fresh round of talks to break the tariffs deadlock.