FTSE 100 barely in credit despite NMC Health PLC’s rally

• FTSE 100 rises 9 points
• Royal Mail tumbles after gloomy trading update
• NMC Health leads the advance on reports its founder is looking to buy out his partners

10.00am: Early gains dissipate

Footsie’s fast start has fizzled despite sterling tanking against the US dollar on foreign exchange markets.

London’s index of blue-chip shares was up 9 points (0.1%) at 7,491, 42 points below its intra-day high.

That the index remains in credit is largely thanks to a 3.6% rise for (), the Middle East-focused hospitals operator that has been under the cosh since hedge fund Muddy Waters questioned its accounting practices and thus its stock market valuation.

The Financial Times reports that the company’s founder, BR Shetty, is contemplating buying out his partners and returning to an “active leadership position” within the company.

Among the mid-caps, () delivered bad news for shareholders with its nine-month trading update.

READ Royal Mail begins robot roll-out as more strikes loom

“Royal Mail has had a torrid time of late and this update will do little to assuage investors’ embedded concerns,” opined Richard Hunter, the head of markets at interactive investor.

“Quite apart from the increasingly challenging landscape, there is an additional headache for Royal Mail from the ongoing industrial relations spat on two fronts. Firstly, the distraction has held back the already delayed transformation plan and secondly, as evidenced during the Black Friday/Cyber Monday and Christmas periods, there was evidence of customers switching to other carriers at the very thought of potential industrial action,” he added.

Royal Mail shares were down 9.7% at 170.95p; you don’t hear so much these days about how the shares were underpriced at 330p when they were floated in October 2013 (although they did reach 600p within four or five months of the flotation).

8.30am: Footsie flies out of the traps

As expected, the FTSE 100 index opened higher on (possibly misplaced) hopes that the world is getting to grips with the coronavirus.

The index of London’s leading shares was up 29 points, or 0.4%, early on, at 7,511.

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“Whether it’s the worst of the coronavirus fears being behind us, US politics or solid economic data, the risk-on mood in markets appears to be showing little sign of running out of steam yet. The reality is that it’s probably a combination of all of these factors and with the diary fairly thin on important events today the likely next hurdle for markets to jump is the US employment report tomorrow,” said Jim Reid at .

PLC () was among the early front-runners on the Footsie after a trading update released to coincide with its annual general meeting.

The shares headed north, rising 2.3% to 1,951p, after the company said organic revenue in the final three months of 2019 rose by 5.3% year-on-year.

Proactive news headlines:

() (TSE:TXP) has revealed successful test results from the Cascadura-1ST1 well, confirming a significant liquids-rich natural gas discovery in the Ortoire block in Trinidad. The well encountered a total of 777 feet of pay in the Herrera formation, and, first stage testing covered the lower-most 162 feet.

() has hailed the “positive and proactive” progress made by it and partner Avion Pharmaceuticals that will see a second phase III trial of the latter’s drug for lupus get underway “as soon as possible” this year. The pair will meet America’s Food & Drug Administration sometime this quarter to seek guidance for an optimised study of Lupuzor.

Faron Pharmaceuticals Oy () (FIRSTNORTH:FARON) said it has amended the protocol for a second phase III study of its drug for acute respiratory distress syndrome (ARDS) to reflect input from the US regulator. Following a meeting with the Food & Drug Administration, the company’s treatment of patients with its interferon-beta (IFN-beta) medication Traumakine will exclude the overlapping use of steroids.

(), a global leader in fuel cell technology and engineering, said it has appointed former () executive, Warren Finegold as an independent non-executive director with effect from 1 March 2020. In a statement, the AIM-listed firm noted that, over a 30-year career, Finegold played an instrumental role in growing Vodafone into one of the world’s largest telecoms companies.

() told investors that its 25% owned Tawke PSC project, host to the Tawke and Peshkabir fields, yielded average production of 122,800 barrels of oil per day (bopd) in the fourth quarter of 2019. The Tawke field produced 63,900 bopd in the three months ended 31 December whilst Peshkabir averaged 58,900 bopd. In a separate statement, Genel also announced management changes, with David McManus appointed as its chairman with immediate effect. Steve Whyte resigned as chairman back in December, to be temporarily replaced by interim chair George Rose.

() generated a 7% total return for its shareholders in the six months to the end of December. The company paid out two dividends totalling 2.9p each in the reporting period – up from 2.8p a year earlier – and is on track to deliver its targeted full-year dividend of 5.8p.

() has reduced the consideration for the sale of its social media analytics business to Access Intelligence PLC (). Cello will make a cash payment of £1.6mln to correspond to a shortfall in the net assets of Pulsar Platform below the agreed target level at the closing of the deal, with Access Intelligence also buying back 4,076,238 of its own shares to reduce the purchase price for one pound.

() is to present to the global paints and coatings industry at five international conferences this spring. The speciality producer of graphene materials noted that over the last 12 months there have been several customer coatings containing Applied Graphene’s graphene dispersion technology hitting the market.

(), the rapidly growing specialist CRO pharmaceutical services company which has a focus on orphan drugs and is a world leader in the provision of virology and vaccine challenge study services, announced that it will be attending and presenting at a series of investor events from the 11th February to 26th March 2020. The group said its executive chairman, Cathal Friel, or CEO Trevor Phillips will be in attendance for all the events and will be presenting an update to existing and potential investors on the company’s acquisition of hVIVO and business plans for 2020.

IQ-AI Ltd announced on Wednesday that it had received a conversion notice from Free Association Books Limited, converting £60,000 convertible loan notes and the £16,875 associated interest, issued on 18 November 2015, at a price of 1.15p, into 5,125,000 ordinary shares also at a price of 1.15p each. Free Association Books is a company in which Trevor Brown, who is an executive director of IQ-AI, has an interest. Following the conversion, the group noted, Brown will be directly and indirectly interested in 43,419,766 ordinary shares, representing approximately 29.75% of the company’s enlarged issued ordinary share capital.

6.45am: London set for a bright start

The FTSE 100 is set to start Thursday stronger after global equities rallied overnight amid softening coronavirus fears and a reported walking back of trade tensions between China and the United States.

CFD and spread-betting firm IG Markets sees the London benchmark up by around 50 points, making the price 7,532 to 7,535.

“Overnight Beijing confirmed its intensions to cut tariffs on US$75 billion worth of US imports in halve,” said David Madden, analyst at CMC Markets.

“The Chinese government didn’t specify which products would be impacted by the move. It will come into effect on February 14 – when the US will cut tariffs from 15% to 7.5% on US$120 billion worth of Chinese imports.”

He added: “The rebound in stock markets continued yesterday on hopes the coronavirus situation would be brought under control. A British news outlet ran a story that a research team in the UK made a ‘significant breakthrough’ in relation to devolving a vaccine for the virus.

“In addition to that an unconfirmed report claimed that a reach group operating at Zhejiang University made progress on a drug created to treat coronavirus.”

On Wall Street, last night, the Dow Jones Industrials Average rallied 483 points, or 1.68% higher to finish at 29,290. The S&P 500, meanwhile, added 1.13% to close at 3,334. The Nasdaq ended 0.43% higher at 9,508.

Asian stocks advanced strongly. Japan’s Nikkei rose by 554 points or 2.38% to trade at 23,873 while Hong Kong’s Hang Seng moved up 674 points or 2.52% to 27,460. The Shanghai Composite added 1.37% to 2,856.

Around the markets

• The pound: US$1.2983, down 0.15%
• Gold: US$1,555 per ounce, 0.14%
• Brent crude: US$56.35 per barrel, up 4.24%
• Bitcoin: US$9,625, up 4.07%

Significant events expected on Thursday:

Finals: Beazley PLC (),

Interims: PLC (), (), Supermarket Income REIT ()

Trading announcements: PLC (), PLC (), (), (), (), ()

FTSE 100 ex-dividends to knock 0.48 points off the index: Sage Group PLC ()

Economic data: US weekly jobless claims

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