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A further bout of consolidation may be under way before long in the European insurance sector.
Shares in insurer RSA were quick out of the blocks today with a rise of 3.2p to 120.8p on turnover of more than 17 million shares following a mutter that it has attracted the attention of Assicurazioni Generali, Italy's biggest financial services supplier.
City speculators say the Italian group may be lining up an offer of 140p a share for RSA, which at the close of business last night had a market tag of almost £4 billion.
Word is Generali has already approached France's Axa about selling a 9.5% stake in RSA held across the range of its various investment funds. RSA refused to comment on the speculation.
Generali would like to become more involved in the UK market.
Three years ago it was said to have appointed HSBC as its financial adviser with a view to buying Aviva, up 11p at 318¾p, which used to trade under the Norwich name and is undergoing a makeover.
Generali was also among the potential bidders for Royal Bank of Scotland's Direct Line insurance business before pulling out at the last minute in May.
Elsewhere in the sector, buyers were coming in for Legal & General, up 2.79p at 56.5p, Old Mutual 4.61p at 85.11p and Prudential, 20½p ahead at 388¼p. It's curious how the insurers are back on investors' shopping lists.
Some traders say it may be linked to the offer for Friends Provident, 0.91p dearer at 70.4p, made last week by entrepreneur Clive Cowdery's acquisition vehicle Resolution, a penny cheaper at 89p.
Shares generally gathered pace throughout the session led by a resurgence in raw material prices such as copper, gold and platinum.
Even oil prices were showing the bears a clean pair of heels. The FTSE 100 index rose for the third consecutive day, up 97.37 points at 4335.05.
Over in New York this afternoon, investors shrugged off any concerns they may have about the economic recovery.
The Dow Jones shrugged off yesterday's lethargy with a rise of 148.73 to 8508.22.
Miners were able to build on yesterday's gains. Rio Tinto jumped 76p to 2095½p as investors were encouraged by its latest production numbers showing a big increase in iron ore output.
Xstrata added 41.7p to 656p on vague whispers its bid for Anglo American, up 25p at 1773½p, may be scuppered by a renewed bid for the Anglo-Swiss group by Brazil's Vale.
There were also gains for Randgold Resources, 121p to 3885p, Vedanta Resources, 50p to 1446p, and BHP Billiton, 46½p to 1429½p.
Things have started looking better for fashion retailer Next, up 54p at 1664p, since it came out with a cautious trading update in March.
Deutsche Bank rates the shares a buy with an 1850p target, and says the decline in the clothing market has been smaller than expected.
Next has stabilised its market share and the pressure on gross margins is likely to be much smaller too.
"While the market is waking up to this, we believe by the end of 2009 the scale of upgrades will be larger than people imagine, and the modest valuation of only 11.1 times this year's depressed earnings a share gives scope for the shares to rise further," it said.
Tullow Oil stood out with a jump of 46½p to 937½p. Ghana has formally approved development of its Jubilee phase 1 well, which will eventually deliver 120,000 barrels of oil a day.
The first delivery is expected in the second half of next year. Merrill Lynch remains a buyer of Tullow.
AIM-listed bioscience specialist Abcam jumped 23p to 697½p on the back of its latest trading update.
The company, which markets antibodies via its online catalogue, said trading in the second half of the year had been strong and the exchange rate environment has been more favourable than was previously envisaged due to the continued relative weakness of sterling.
As a result, sales growth for the year just ended has come in ahead of the company's earlier expectations. Gross margins have also been strong and pre-tax profits will be around 9% higher than last year's £7.95 million.
Brokers reflected on yesterday's trading update from soft drinks supplier Britvic which boasted full-year profits should beat expectations. Deutsche Bank has raised its share price target from 375p to 400p while repeating its buy rating.
Merrill Lynch raised its sights on the price from 340p to 360p. It also has a buy rating on the shares, up 12¼p at 319½p.
