Interactive Investor

Shares round-up: Hastings, Morgan Sindall, Centamin

5th August 2020 13:29

Graeme Evans from interactive investor

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The FTSE 100 has had several winners today, including gold stocks, mining, insurers and construction.

Improved risk appetite boosted the FTSE 100 index today, although with a £1.7 billion takeover and several strong updates the serious money was being made by investors in the second tier.

Motor insurer Hastings (LSE:HSTG) was the biggest riser in the FTSE 250 index as its shares jumped 18% on the back of an agreement to sell the business to parties including Finland's Sampo.

There were also double-digit percentage rises for construction firm Morgan Sindall (LSE:MGNS) and iron ore miner Ferrexpo (LSE:FXPO) in the wake of interim results. Meanwhile easyJet (LSE:EZJ) rose 8% for a second session in a row after it said yesterday it had increased capacity to 40% for the rest of the summer.

A record gold price above 2,000 US dollars also meant Hochschild Mining (LSE:HOC) surged up the FTSE 250 index risers board, with the gain of 9% for the Americas-based silver and gold miner mirrored by a 7% jump for Egypt-focused gold specialist Centamin (LSE:CEY).

The appeal of gold as a safe haven asset, reflecting weakness in the US dollar and heightened uncertainty over the impact of Covid-19, continues to benefit a number of blue-chip stocks.

Russia and Kazakhstan-focused Polymetal International (LSE:POLY) is now up 70% for the year to date after adding another 5% today, while Fresnillo (LSE:FRES), Glencore (LSE:GLEN) and Antofagasta (LSE:ANTO) were among other miners up by 3% or more in the FTSE 100 index.

The biggest top flight rise was achieved by British Airways owner International Consolidated Airlines Group (LSE:IAG), which put on another 8% on top of Tuesday's 7% improvement as risk appetite in markets benefited from hopes the US Congress will agree on a stimulus package.

One of the lesser known stocks in the FTSE 100 index was in the limelight after half-year results helped shares in bottling company Coca-Cola HBC (LSE:CCH) to rise 4%. The company, which has operations in 28 countries including Ireland, Russia and Nigeria, highlighted improved revenue trends as a decline of 36% seen in April was just 5% lower by last month.

Overall, the FTSE 100 was 1.2% higher at 6,110.8. This performance was matched by the domestic-focused FTSE 250 index, which added more than 200 points to 17,512.

This included a bounce back of 12% to 1,166p for construction and regeneration firm Morgan Sindall after it said a clearer view on the impact of Covid-19 let it reinstate financial guidance for this year. Profits are expected to be between £50 million and £60 million, having fallen by 57% to £15.7 million in the first six months of 2020.

The company, which is geared toward the increasing demand for affordable housing, urban regeneration and infrastructure, said it was well set for growth beyond 2020 after reporting a secured workload of £8 billion, which is up 5% on a year earlier. Shares had been as high as 1,970p in February before falling back to 1,030p at the end of last month.

While there is still no dividend at Morgan Sindall, fellow FTSE 250 stock Hill & Smith (LSE:HILS) announced that it would resume payments with the award of 9.2p a share. Half-year profits were down 38% to £22.8 million, but the motorway barrier specialist remains a strong generator of cash and boasts significant financial headroom to drive future growth.

It is also optimistic about the future after a gradual recovery in trading, as key markets in the UK and United States start to reopen after Covid-19 lockdowns. Shares rose 3% today.

Chief executive Derek Muir says:

“It remains likely that governments will stimulate their economies through additional or accelerated infrastructure spending, which the group is well placed to benefit from in the remainder of 2020 and into 2021.”

Ferrexpo, which is one of the world's largest producers of iron ore pellets for the steel industry, is also upbeat. It has adapted to a changing market environment by selling increased volumes to China, where demand remains robust. The Ukraine-based group has also benefited from the average iron ore price remaining above $100 a tonne.

Half-year profits were 8% lower, at $250 million. However, shares still jumped 9% after the company announced an unchanged dividend of 6.6 cents and says it expects to see a recovery in steel demand outside China.

These articles are provided for information purposes only.  Occasionally, an opinion about whether to buy or sell a specific investment may be provided by third parties.  The content is not intended to be a personal recommendation to buy or sell any financial instrument or product, or to adopt any investment strategy as it is not provided based on an assessment of your investing knowledge and experience, your financial situation or your investment objectives. The value of your investments, and the income derived from them, may go down as well as up. You may not get back all the money that you invest. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment adviser.

Full performance can be found on the company or index summary page on the interactive investor website. Simply click on the company's or index name highlighted in the article.

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