Market Report: Seplat approaches Afren about a possible merger

The City is getting excited about Afren. The bombed-out oil and gas explorer – which has struggled through a boardroom scandal and falling oil prices over the past year – revealed last month that it had received a “highly preliminary” approach from Nigeria’s Seplat about a possible merger.

Since then there’s been no more word on any deal and more pain for Afren, as it confessed to a dud well earlier this week. But yesterday traders were jamming the “buy” buttons after Seplat announced it has raised $1bn (£660m) from banks – which the City took to mean that a deal can’t be too far away. Afren leapt 7.2p to 28.76p; Seplat rose 3.5p to 120p.

The shock scrapping of the Swiss franc cap left heads spinning, but the FTSE 100 recovered in afternoon trading to end the day 110.32 points higher at 6,498.78. For some, the impact was more keenly felt. The spread-better IG tumbled 32.5p to 709.5p as it lamely admitted that the franc’s jump has left it sitting on a loss of up to £30m. Its Israeli rival Plus500 said it had suffered “no material impact” from the Swiss move, but it still closed down 31.5p at 602.5p.

Goldminers had a good run, with traders using them as a proxy for the precious metal while the currency market went into turmoil. Randgold Resources topped the blue-chip index, up 315p at 5,265p; Fresnillo jumped 39p to 855p ;and Polymetal International roared 51.5p higher to 591p.

WM Morrison rose 9p to 188.1p as whispers continued that Aldi could be plotting a bid. And J Sainsbury jumped 12.2p to 255.3p as the old yarn of a Qatari bid takeover resurfaced.

Despite turmoil in the mining industry, BHP Billiton beat the slump to gain 63p to 1,348p. The catalyst was an upgrade from Goldman Sachs, which backed the business’s upcoming spin-off, highlighted its attractive dividend and tipped BHP to benefit from an expected bounce-back in oil prices.

JP Morgan revealed itself as an investor in the City’s favourite mixer, Fever-Tree, flat at 206p. The investment bank holds a 5 per cent slug of the tonic water maker and joins BlackRock on the share register.