Insurers lead the charge today, with Legal & General and Standard Life looking to bounce back from the drubbing both received in the wake of the Budget last week. The former has won an annuity contract worth a whopping £3 billion, while the latter has confirmed its acquisition of Ignis Asset Management. The news is proof, if any were needed, that the sector is not dead and buried despite the annuity changes. While Legal & General shares still have plenty of lost ground to recover, Standard Life is back at its highs for 2014.
In the banking sector, Lloyds is suffering following the news of a further government stake sale. The sector as a whole is off by nearly 8% since the start of the year, versus a 1.6% drop for the FTSE 100 overall. This underperformance continues to hold back the broader index, making a sustained rally that much harder.
Housebuilder Bellway has nudged above the £17 level this morning after a 73% jump in its profits; the sector continues to deliver impressive performance for investors.
Now valued at 19 times earnings, the company is beginning to look pricey, but the government’s continuing commitment to the Help to Buy scheme provides a firm foundation for the future.
US durable goods orders are the focus in economic terms this afternoon, but the main excitement will be the flotation of online gaming firm King. The shares will start at $22.50, the mid-point of the expected range, valuing the company around $7.1 billion. The IG grey market has seen additional buying this morning, pushing the market cap over the $9 billion mark, equating to a share price around $28.50.
Ahead of the open, we expect the Dow Jones to start 40 points higher at 16,409.