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“Strength in mining stocks helps to extend yesterday’s FTSE 100 rally. The blue chip index advanced another 0.9% to 7,416 with Glencore, BHP and Anglo American among the top performers,” says Russ Mould, Investment Director at AJ Bell.
“In terms of trend-following, Carnival, Imperial Brands and Pearson both continued to fall after yesterday’s trio of profit warnings.
“The FTSE 100 has now risen by 10.2% this year, twice as much as India’s BSE 100 Index but less than half that achieved by the NASDAQ index in the US which is up 22.8%. The S&P index, also in the US, is up by 18.8% and Germany’s DAX Xetra index has advanced by 16.9%.
“Next week the market will be focused on first half results from Tesco (2 Oct) and Ted Baker (3 Oct), as well as the latest purchasing managers’ indices for UK manufacturing, construction and services."
Pennon
“Is a break-up of utilities group Pennon on the cards? The company has announced a strategic review of the group which one can assume will include a potential demerger of waste recycling business Viridor.
“The growing investor interest in all things ESG-related could see Viridor achieve a much higher valuation as a standalone business. It would provide investors with an alternative way to play the UK recycling industry than simply buying shares in Biffa.
“Viridor works for more than 150 local authorities and major corporate clients as well as over 32,000 customers across the country. It has a network of more than 300 recycling, energy recovery and waste management facilities.
“There is a growing trend for companies to spin off ‘hidden gems’ or underappreciated operations in the hope of creating more value for shareholders. Prudential is about to spin off M&G, Ferguson is going to separate its UK business from the group, and Smiths Group is going to demerge its medical arm.”
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