Market Report: Man Group finally starting to reap the benefits of Manny Roman's recovery programme
Friday 20 June 2014
It’s been more than a year since Manny Roman took over Man Group and the hedge fund is finally starting to reap the benefits of his recovery programme.
Investors are coming back, costs are down and the company has realised that it needs to diversify away from its flagship, computer-driven AHL fund to make progress. Because of this, the shares are up about 23 per cent this year, having risen by 5.95p to 105.10p yesterday as the company agreed to pay $219m (£128m) for the US asset manager Numeric Holdings.
Mr Roman said the deal would help the company expand in the US and shareholders seemed to agree.
Man Group was one of the big risers on the London Stock Exchange yesterday as the FTSE 100 put on 29.55 points to 6,808.11 and the FTSE 250 climbed 59.68 points to 15,683.88. Both markets were boosted by overnight gains in the US and Asia after the US Federal Reserve gave an upbeat prognosis for the American economy.
Garry White, chief investment officer at the broker Charles Stanley, said: “Federal Reserve chair Janet Yellen threw the market a fillip when she said that threats to the US recovery meant interest rates were likely to stay low for some time.”
By reducing consumers’ spending power, he added, rate rises can hit companies’ bottom lines. This is why increases are bad for equity markets.
Mr White added: “The main news of the day was Rolls-Royce, which rose 82p to 1,092p. It said it would buy back £1bn of shares, a move which boosts a company’s earnings per share, instead of making major acquisitions.”
Elsewhere in the market, the renewable-power specialist Infinis Energy said its earnings before interest, taxes, depreciation and amortisation rose 18 per cent to £148.4m during the year to 31 March, its first annual results since listing in November.
Shares in the company – which is backed by the private equity firm Terra Firma, run by Guy Hands – rose 9p to 237.5p. That’s still some way below the 260p at which they were valued at the time of the listing.
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