FTSE 100 sets a record as fraud fears sink oil firm
BRITAIN’S blue- chip stocks closed at a record high last night as the FTSE 100 climbed 0.7pc, or 48.8, to 7435.4, securing its third running week of gains.
The market has had a stellar run in recent weeks, and was helped yesterday by a 9pc gain for drug maker AstraZeneca, the stock climbing 428.5p to 5176p.
Stocks have also been boosted by the fall in the pound which has boosted revenues for big companies which get most of their earnings outside the UK.
Meanwhile, oilfield services provider Petrofac tanked after the Serious Fraud Office launched an investigation into its connections with scandal-hit Monaco-based firm Unaoil.
Petrofac lost £396m of its value after the SFO confirmed it is investigating the firm on the grounds of suspected bribery, corruption, and money laundering.
The company’s chief executive officer Ayman Asfari and chief operating officer Marwan Chedid have also been questioned under caution. The SFO launched an investigation into Unaoil last year over allegations of corruption across the oil industry.
As part of the probe into foul play the homes of Unaoil’s directors were raided by UK authorities. Petrofac said it used Unaoil for consultancy services in Kazakhstan between 2002 and 2009. Shares finished down 14.1pc, or 114.5p, to 700p, a ten-month low.
Hikma Pharmaceuticals was left no time for a breather after US approval for its asthma drug Advair was delayed on Thursday.
The firm was the FTSE’s biggest loser for the second day in a row after being downgraded by two brokers. Stifel cut its target price for the firm to 2300p from 2550p, although it retained a ‘buy’ rating. Meanwhile, JP Morgan cut the stock’s price target to 1800p from 2400p. It follows concerns that Hikma will have to wait 10 months for another response from the US regulator, meaning another competition-free year for rival GlaxoSmith
Kline (up 2.3pc or 37.5p to 1665p). Hikma is down 10.7pc over the last two sessions after falling 2pc, or 36p, yesterday to 1759p.
Brick maker Ibstock rose to the top of the FTSE 250 after an encouraging first review from broker Berenberg. Its analysts cited a healthy UK new-build residential construction market alongside ongoing government support.
It also said Ibstock is one of just three companies controlling more than 90pc of the brick-making market, meaning it is unlikely that new competitors will emerge.
It initiated its coverage of the stock with a ‘buy’ rating and a price target of 310p. Shares jumped 2.9pc, or 6.6p, to 237.6p. Transport firm Stobart Group hit a record high after announcing it would buy back 3m of its shares. With share buy-backs typically increasing value for investors, the company rose 4.2pc, or 10p, to 246p. The news came a day after Stobart announced founder Andrew Tinkler will step down as chief executive at its June AGM to be replaced by EasyJet’s former chief operating officer Warwick Brady. Tinkler will remain at the firm, heading up a new unit focusing on investments.
Alternatively in small cap land, e- sports firm Gfinity rose after placing more than 31m shares to raise £6.3m. The firm hosts and broadcasts online video game competitions for games such as Call Of Duty and Fifa as well as operating a gaming arena in London.
It will use the money to develop software, invest in broadcasting and personnel, and launch events around the world which it calls the Elite Series. Shares were up 2.1pc, or 0.5p, to 24.25p, and are up 79.6pc, for the year.