UK stocks opened on the front foot on Thursday, the first day of the final quarter of the year, with the FTSE 100 gaining 0.8% to 5,195 points early on.

This was despite comments from the chief medical officer Chris Whitty yesterday that hospitalisations and deaths are showing a clear spike amid a rise in new Covid-19 cases.

Trading in Asia was relatively quiet with slightly lower prices in China and Japan while Brent Oil was 0.2% lower at $40 a barrel and Gold was 0.5% higher at $1,895 an ounce. On the foreign exchange markets the pound was trading 0.3% lower against the US dollar at $1.28 as the final round of Brexit talks continued today.

CORPORATE NEWS

Rolls-Royce (RR.) announced a fully underwritten 10 for 3 rights issue of up to 6.4 million shares to raise gross proceeds of approximately £2 billion at 32p representing a 41.4% discount to the theoretical ex-rights price with reference to the closing price of 130p on 30 September.

In addition the company said it intends to raise £1 billion of funds through a bond issue and has agreed commitments for a new two year term loan facility of £1 billion.

Rolls-Royce has also received an indication of support in principle from UK Export Finance for an extension of its 80% guarantee to support a potential increase of the company’s existing £2 billion five year term loan of up to £1 billion, this being subject to the completion of the rights issue. The shares opened 6% lower at 121.8p.

Shares in motoring and cycling products retailer Halfords (HFD) accelerated 16% higher to 211p after the company upgraded its first-half profit outlook amid ongoing momentum, though did stress it was cautious on its outlook for the second half of the year as  Covid-19 cases mount.

First-half pre-tax profit is expected to be in excess of £55 million as a result of continued momentum in cycling and motoring products and services. Like-for-like growth in the five weeks to 25 September 2020 was up 22% with cycling continuing to perform well, up 46% on like-for-like basis amid unprecedented levels of demand.

Medical devices company Smith & Nephew (SN.) said in a trading update that all three global franchises had recovered strongly since the spring with overall second quarter revenues down 29.3%. The improvement was strongest in its orthopaedics franchise, as global levels of elective surgery continued to recover. The shares traded 2.5% higher to £15.5.

Home improvement retailer Kingfisher (KGF) said it had completed the sale of Castorama Russia to Maxidom, a home improvement company in Russia, for a RUB 7.4 billion, or about £73 million.

Under the terms of the deal, the company will receive 80% at the closing of the transaction and remaining 20% would be paid in equal instalments over two years. The shares nudged up 0.35% to 298p.

Soft drinks maker Britvic (BVIC) said it had completed the sale of its juice assets in France to Refresco. The sale included three juice manufacturing sites, related private label juice business and the Fruite brand.

Shares in Attraqt (ATQT:AIM) increased 8% to 33.5p after the online experience orchestration company announced the acquisition of Aleph Search, an artificial intelligence powered search technology specialist.

The firm also raised £4 million of funds in a placing at 32 pence per share to fund the acquisition, increase investment in sales, marketing and product development activities and to accelerate growth.

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Issue Date: 01 Oct 2020