Morning:
14°c
Thomas Cook enjoyed a day in the sun today despite its controlling shareholder filing for bankruptcy.
The rise came thanks to Rewe, Germany's third-biggest travel company, which said it would be interested in snapping up Arcandor's 52.8% Cook stake if it goes up for sale.
The package holidays group, which had been the Footsie's biggest dud on fears for its parent company, recovered to be the index's biggest winner, trading 14¾p higher at 229p.
Chief executive Manny Fontenla-Novoa released a “business as usual” statement to reassure holidaymakers that Thomas Cook was protected from Arcandor's collapse.
The German retail giant told the German government that it has abandoned a last-ditch appeal for state aid and has instead filed for insolvency.
Sector experts say the Thomas Cook stake could be sold to a single party or placed in the market, or there could even be a management buyout.
The gains came despite Cazenove advising clients to “take a break” from Cook and rival Tui Travel, 1p stronger at 247¼p, amid concerns that next year will be tougher.
London shares lost much of their early gains to trade only slightly higher, with the Footsie up 14.26 points at 4419.489. Trading volumes were exceptionally light for a second day, making for volatile trading. In New York, the Dow Jones opened up 6.12 points at 8770.61.
Investors said hasta la vista to Pearson's shares today as Arnold Schwarzenegger, the Governor of California, unveiled plans to do away with school textbooks to save cash. Shares in the publisher of educational tomes and the Financial Times sank 13p to 624p.
The sell-off came despite Citigroup stressing that Pearson should gain market share from the initiative, and that it will result in steadier income flows and lower costs for the company. For the last decade, Pearson has been moving away from the textbooks model, and Citi reckons its rivals are far less prepared for the change.
Step off a plane in Shanghai, and you may soon be greeted with a familiar sight: a London black cab. Taxi maker Manganese Bronze today said it would raise £9.4 million to try to flog cabs outside the UK. The shares leapt 22p to 228p after the firm said it will place almost 5.4 million at 187p a pop: a discount of 9.2% on yesterday's closing price.
Oil explorer Tullow Oil surged 40p to 1000p as Deutsche Bank lifted its price target from 1001p to 1165p. The brokerage says Tullow's history of drilling success and the strength of its upcoming wells should help it to perform better than rivals.
BowLeven, the oil and gas explorer with interests in West Africa, lost 4¼p to 69½p after announcing it had placed 106 million new shares at 67p each. The move is to fund further appraisals of a field off Cameroon.
GKN was the biggest winner among mid-caps, jumping 11p to 133¾p after Bank of America Merrill Lynch raised the engineer to buy from neutral. The broker predicts a “smoother ride ahead” and upped its price target from 110p to 155p, saying the company's biggest market — the automotive industry — is finally showing signs of stabilising. GKN's shares have come under pressure in the past month amid talk of a cash call.
London Stock Exchange continued its winning streak. The company, which is expected to reclaim its blue-chip status in tomorrow's FTSE reshuffle, gained 5p to 776p as Bernstein Research raised its rating on the shares from neutral to buy and set a target price of £9.50.
Bernstein's analysts reckon that a double-whammy of cost-cutting and low interest rates should boost the shares in the coming months.
New chief executive Xavier Rolet has hinted that the exchange is looking to replace its current trading system, TradElect. The move would enable LSE to compete on more equal terms with its rivals on trading tariffs and speed and could eventually help to cut costs.
