MARKET REPORT: National Grid is finding favour amid whispers UK’s largest listed utility has a major acquisition in …

Geoff Foster for the Daily Mail

Published:
21:55 GMT, 21 January 2016

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Updated:
21:55 GMT, 21 January 2016

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Forever considered a defensive area of the market in times of extreme stress, selected utilities continue to find favour on yield considerations.

National Grid, which brings in a stonking dividend yield of 4.8 per cent, rose 7.6p to 925.4p amid whispers that the UK’s largest listed utility has a major acquisition in the pipeline.

Dealers heard that the London-based multi-utility is one of three groups interested in acquiring Empire District Electric Company, an investor-owned utility providing electric, natural gas and water services with 215,000 customers in the US. It hoisted the ‘For Sale’ sign three months ago and word has it that an agreed deal is now close.

Empire’s shares trade around $27 and speculation suggests the take-out price could be in the region of $35 a share.

Whispers: National Grid, the UK’s largest listed utility, is rumoured to have a major acquisition in the pipeline

Empire District has 213,000 customers, including about 43,000 natural gas customers. National Grid already operates gas and electricity distribution networks in the US and so Empire District would prove to be a perfect bolt-on.

Having already dragged itself off the floor with an early rally of 25 points or so, the Footsie advanced further to finish 100.21 points better at 5773.79 after reassuring comments from European Central Bank president Mario Draghi. IG’s Alastair McCaig said: ‘The emphasis shifted from “whatever it takes” to “no limits” where action is concerned, with the small caveat that nothing will happen (on ECB rates) until they have had their March meeting’. The FTSE 250 bounced 192.55 points to 15,833.56.

Wall Street recovered 115.94 points after Draghi had raised hopes of easing monetary policy in March. David Kohl, chief currency strategist at Julius Baer, said: ‘We remain confident that the current support can hold and a rebound should take place in due course. Global equity markets remain in difficult territories but could see some near-term relief.’

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Loyal long-term holders of education group Pearson heaved a sigh of relief after the board said it would be holding the 2015 dividend payment. The shares rallied strongly to close 114.5p higher at 772p.

Miners put on a braver face with commodities trader Glencore up 11.05p at 82.25p. Anglo American rallied 26.95p to 248p and BHP Billiton 61.9p to 642.8p.

Contract catering giant Compass traded without entitlement to the recent dividend payment and closed 46p off at 1088p. Broker UBS this week lifted its target price to £12.

A steadier oil price and revived takeover speculation lifted Tullow Oil 11p at 129.2p.

Awaiting news on the Sainsbury’s (1.8p easier at 231.1p) bid situation, Argos owner Home Retail fell 2.8p to 137.2p. Despite Bank of America/Merrill Lynch halving its target price to 60p, oil equipment services group Lamprell jumped 8.25p to 72.5p on bid hopes. September 2014’s peak was 178p.

Followers of Fusionex International were puzzled as to why the shares collapsed 117.5p or 36 per cent to 212.5p following results which exceeded market expectations due to better-than-expected GIANT product sales.

Clients now total 36, above the expected 30. Panmure Gordon’s George O’Connor lifted his target price to 744p from 722p and reiterated that he thinks Fusionex is one of AIM’s most exciting technology ‘plays’, and it is atypical among its peer group: it is a well established, growing, strong technology franchise, pays a dividend, and is ‘born global’.

Safestore edged up a penny to 331p after the UK’s largest self-storage provider reported strong results showing cash tax adjusted earnings per share up 23 per cent at 16.6p and a 25.5 per cent increase in the final dividend to 6.65p. The company has made a robust start to the current year with like-for-like revenue for the first two months up 7 per cent.

Buyers chased 4imprint 55p higher to 1195p after it confirmed headline revenue growth for the year of 20 per cent, helped by a strong second-half performance. Underlying pre-tax profits will be ‘at least in line with market expectations’. Broker Peel Hunt upgraded to buy from hold with a target price of 1350p.

Bullish fourth-quarter production figures helped Acacia Mining put on 13.8p to 175.6p. The firm delivered its highest quarter of production in its lifetime as a public company, with star performing mine Bulyanhulu delivering an 18 per cent increase on Q4, 2014.

Scrappy selling dragged Fox Marble 0.5p easier to 12p. The luxury marble producer and supplier to Berkeley Homes expanded its order book and has worked to increase its distribution network across the globe.

Last year sales are expected to be around £230,000 with the bulk of the existing 2015 order book pushed into the first half of 2016. Confirmed orders to date for 2016 are £3.5million.

Expansion news helped easyHotel improve 1.5p to 89.5p. It has conditionally acquired a 125-year lease on a Birmingham site, which it intends to convert into an easyHotel.

Irish oil and gas company San Leon Energy, in which Toscafund is a major shareholder, fell to 25p after announcing that discussions with an unnamed buyer have ended.

Buyers soon reappeared on hopes other interested parties will appear and the close was 0.25p off at 28.88p.

San Leon has a 35 per cent interest in the Rawicz field in Poland, expected to be the largest gas development in the country for 20 years.