Shares Spread Betting: Invensys Surges on Surprise Sale of Rail Signalling Business
Equities have had their morning coffee today and the FTSE is on a charge, adding nearly 50 points to reach 5850 and three-week highs.
In shares spread betting, the late breaking story of yesterday, that Invensys would be offloading its reputable rail signalling business to German giant Siemens, has sent their shares skyrocketing.
Having added 27% yesterday, they trade 12% better today. The prospect of a 76p return to shareholders has enticed buyers and caused a flurry of broker revisions this morning.
Conspiracy theories are out in force, as the value of the deal is roughly the same as Invensys’ market cap.
Are Siemens paying too much? Does this leave the potential for counter bids, as a portion of the Invensys business is seemingly available as a standalone entity?
We had seen them come under scrutiny as a target earlier in 2012, and paying nearly the full price of the firm for around a third of its business has taken the City by surprise.
The feeling seems to be that ‘the sum of the parts is worth more than the whole’, and this could leave the company vulnerable in the coming months.
US markets enjoyed a politically-induced rally as the Speaker of the House spoke optimistically of progress towards a fiscal cliff resolution, after talks with business leaders appeared to be fruitful.
Today’s talks keep the issue centre stage, but risk assets are trading in ‘solution mode’.
Currently we see another 65 points to go on top of yesterday’s 107-point Dow rally, with an opening call of 13,050.
Spread betting carries a high level of risk to your capital. You may lose more than your initial investment. It may not be suitable for all investors. Only speculate with money that you can afford to lose. Please ensure you fully understand the risks involved and seek independent financial advice where necessary.
Financial Market Comments from Will Hedden, Sales Trader, IG Index.
The above comments do not constitute investment advice and Clean Financial accepts no responsibility for any use that may be made of them.
Content provided by IG Index which is Authorised and regulated by the Financial Services Authority. FSA Register number 114059.
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