Yahoo Finance Market report: Glencore rises on Bunge bid rumours
Mining giant Glencore’s interest in US grain trader Bunge was once again gaining traction in the City rumour mill as London’s metal and tobacco giants led a broad-based rebound on the FTSE 100.
Chatter in the City speculated that the race for Bunge is heating up with Glencore and US giant Archer Daniels Midland (ADM) put in the frame for a bid. Both have long been linked with a deal for Bunge but the rumour reheat speculated that a move for the $10bn-valued (£7.6bn) company could be nearer as Glencore resolves its dispute in the Democratic Republic of Congo. ADM approached Bunge over a tie-up earlier this year but talks stalled, while Glencore is now out of a standstill deal stopping it from making a bid. Glencore made an “informal” approach to Bunge last year.
As market sentiment recovered amid a brief pause in the war of words between the US and China, heavily weighted Glencore gained 2.7p to 374.4p. The wider index gave up most of its early 1.3pc gain to push up just 23.55 points to 7,627.40, a 0.3pc climb, as a global rebound ran out of steam during afternoon trading.
Elsewhere, surging tech star Ocado could become the “Microsoft of retail”, City analysts at Peel Hunt declared in a gushing “buy” note to lift the company 52.7p to £10.02.
Analyst James Lockyer argued that its automated warehouse could be expanded beyond the grocery sector and become as widely adopted as the Windows operating system in the retail industry.
Ocado has now struck five international deals to supply its technology which uses robots to put together a customer’s order.
The FTSE 100 company has put in an exclusivity clause to lure in clients but there is a risk that a cheaper and more universal rival will enter the market, he argued: “For Ocado to supersize over the longer run and become the operating system for retail, it will have to be less niche and become the standard.”
Tobacco giants British American Tobacco and Imperial Brands were leading the modest rebound in London after Liberum eased investors’ fears over tightening regulation in the US. The market is bracing for the Food and Drug Administration to cap nicotine levels sooner than it can “reasonably deliver” and new regulation to help Americans break the habit is more likely to be implemented in 2023, it argued to boost US-exposed BAT 88p to £37.79 and its “top pick” Imperial Brands 84p to £27.05.
Broker Jefferies piled the pressure on McCarthy & Stone following the retirement housebuilder’s profit warning on Tuesday.
Analyst Anthony Codling warned in a downgrade to “hold” to expect a decline in “last-time buyer demand” as older generations are “now less likely to want to climb down” the housing ladder, knocking its shares 2.7p to 105.5p, a fresh all-time low.
Potash miner Sirius Minerals advanced 0.6p to 32.1p after inking a seven-year deal to supply 350,000 tons a year of its fertiliser product.
