LONDON Market Open Report (Monday, November 9, 2009)

London open: Miners and insurers lead the charge

Leading shares have made a confident start to the week following the latest G20 meeting, with insurers and miners leading the way higher.

A statement issued after this weekend’s G20 summit reassured marlkets that there would be no premature withdrawal of economic stimulus packages.

“The recovery is uneven and remains dependent on policy support, and high unemployment is a major concern,” read a G20 statement. "To restore the global economy and financial system to health, we agreed to maintain support for the recovery until it is assured."

In company news, mining giant Anglo American has added former Sainsbury chairman, Sir Philip Hampton, to the board in a non-executive role. Hampton has been chairman of Royal Bank of Scotland (RBS) since February 2009.

Elsewhere in the sector, Kazakhmys, Fresnillo, Rio Tinto, BHP Billiton and Xstrata all push on strongly as metal prices take flight in the wake of the G20 pronouncement.

The expected lift to global stock markets also prompts demand for the heavily invested insurers, with Prudential and Legal & General the picks of the bunch.

Surging data revenues helped satellite operator Inmarsat lift profits by nearly a third over the past three months. Revenue overall in the three months to September rose by 8.7% to $176.7m (2008: $162.5m). Profit before tax rose by 31% to $70m. Free cash flow rose 6% to $102.9m (2008: $54.0m).

G4S said things have been steady at security services firm since August’s interims, with operating profit for the first nine months of 2009 up 25% at actual exchange rates and revenue up by 23%. At constant exchange rates, profit rose 12% and revenue by 9%.

The market is waiting to see whether US processed foods group Kraft will announce a hostile bid for UK confectionerCadbury today. The deadline for the bid decision is 5:00pm today. Kraft is expected to launch a bid slightly above the Ł10.2bn offered when it approached the Dairy Milk firm in September, a person familiar with the deal told the Times.

Insurer and reinsurer Beazley has seen strong growth in premiums written this year, even after it pushed through rate increases. Gross premiums written in the first nine months of 2009 rose 45% to Ł861.9m from Ł595.4m in the first nine months of last year.

Hiscox is in confident mood after boosting premium income by 31.7% in the first nine months of 2009, giving the specialist insurer “good reasons to be optimistic”.

Sales slumped further at Aer Lingus over the past three months with revenue down by nearly 10% as fares came under heavy pressure both on short-haul and long-haul flights.

Oil and gas production levels were both higher in the third quarter at energy company JKX Oil and Gas. Total production in the third quarter of 2009 rose to 13,657 barrels of oil equivalent per day (boepd), up 24% from 10,978 boepd in the same period of 2008.

FTSE 100 - Risers
Prudential (PRU) 605.50p +4.76%
Shire Plc (SHP) 1,141.00p +4.20%
Inmarsat (ISAT) 617.00p +3.78%
Kazakhmys (KAZ) 1,249.00p +2.97%
Fresnillo (FRES) 862.50p +2.86%
Rio Tinto (RIO) 2,995.50p +2.69%

FTSE 100 - Fallers
G4S (GFS) 247.80p -1.98%
Lloyds Banking Group (LLOY) 84.15p -0.77%
Rentokil Initial (RTO) 104.30p -0.67%
Cable & Wireless (CW.) 138.50p -0.36%
Reckitt Benckiser Group (RB.) 3,010.00p -0.30%
Alliance Trust (ATST) 305.60p -0.26%