The City has been toasting a possible buyout of drinks giant Diageo. But that’s not the reason Nomura’s analysts raised a glass to the Johnnie Walker and Smirnoff maker, up 25p to 1,932p.
They upgraded the stock to buy, suggesting clients tap into the recovery story for the global spirits industry. After a few meetings with the company, the Japanese broker’s analysts are more confident a recovery could be on the cards next year.
The number crunchers have their doubts about the recent reports that Brazil’s richest man, Jorge Paulo Lemann, is weighing up a bid through his private equity firm 3G Capital.
The FTSE 100 hovered around Tuesday’s closing mark, up just 9.2 points to 6,834.87 with global markets more optimistic about a deal to keep Greece in the eurozone.
Angus Campbell, senior analyst at FxPro, reflected the optimism that has swept across markets.
“It doesn’t look like Greece will receive any further debt relief, but their proposals have been all but accepted so we can pretty much rest assured that the €7.2 billion of bailout funds will finally be released later this week,” he said.
Brokers created much of the excitement, with Mike Ashley’s Sports Direct the top FTSE 100 riser up 22.5p to 725p after an upgrade to outperform from RBC Capital.
Shares in Associated British Foods, down 30p to 3,064p, went out of fashion after the Canadian investment bank dropped the Primark owner off its outperform list. RBC has concerns over the discount clothing retailer’s US invasion: “It will take time to achieve critical mass there and the experience of H&M and Inditex shows that Primark will have to adapt its offer significantly over time.”
AIM-listed Firestone Diamonds lost some sparkle, down 1.75p at 32.5p, as it delayed the start of production at its mine in Lesotho by six months with bad weather hampering progress.
Motif Bio, up 1p at 65.25p, raised £22m less than three months after floating on AIM. The funds were raised at 50p a share, a 22 per cent discount to Monday’s closing market price but well above the 20p Motif listed at.Reuse content