European defence stocks rallied as analysts predicted an increase in shareholder returns and deal making across the industry next year.
Bank of America said firms have taken huge strides in generating cash over the past two years and now have healthier balance sheets and lower debt.
This means there is greater scope to return cash to investors or pursue mergers and acquisitions, analysts at the investment bank added.
Looking at the London market, Bank of America said it expects Rolls-Royce to reinstate dividends next year.
In a further boost, analysts at Jefferies said Rolls was likely to benefit from its civil aerospace division and improved cash flow.
The broker also sounded an optimistic note on France’s Thales, raising its rating from ‘hold’ to ‘buy’ on the belief that the recent Rafale jet orders should increase cash flow momentum.
Shares in Rolls-Royce, which has been one of the best performing stocks in the FTSE 100 this year, rose 0.4 per cent, or 0.8p, to 219.9p and BAE Systems rose in early trading but closed flat at 1007.5p. In Europe, Thales rose 1.1 per cent.
The FTSE 100 dropped 0.2 per cent, or 11.78 points, to 7452.76 and the FTSE 250 slid 0.07pc, or 12.76 points, to 18524.14.
Outsourcer Mitie bought JCA Engineering for £31.5million.
The mid-cap firm said its purchase of the Stevenage-based group, which focuses on projects regarding data centres, life sciences and healthcare sectors, is part of a strategy to invest in ‘high growth companies’. Mitie shares rose 0.7 per cent, or 0.7p, to 98.4p.
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Rolex seller Watches of Switzerland received a vote of confidence following the recent sell-off as four board members purchased nearly £1million of shares.
Finance boss Anders Romberg bought £584,700 of stock. Chairman Ian Carter snapped up £205,690.
Non-executive directors Tea Colaianni and Robert Moorhead both purchased nearly £50,000 of shares.
The stock plunged by a quarter on August 25 amid fears the watchmaker could lose its market share after Rolex bought rival Bucherer. Shares gained 3.7 per cent, or 21.5p, to 611p .
CMC Markets appointed Albert Soleiman to be its finance boss.
He first joined the spread betting company in 2005 and became group head of tax three years later. Having briefly left the company, Soleiman returned in 2020 to lead the launch of CMC Invest.
He will succeed Euan Marshall, who took on the role in November 2019. Shares fell 1.3 per cent, or 1.4p, to 106.4p. Johnson Matthey failed to extend its gains after shares soared 9.9 per cent on Friday.
Takeover speculation boosted the stock last week as the industrials investor Standard Industries doubled its stake in the chemicals giant.
Deutsche Bank Research said the move ‘reiterates under-appreciated strategic value’ in the mid-cap firm. But shares fell 2.2 per cent, or 38.5p, to 1752p.
AFC Energy, the hydrogen fuel cell developer, signed a distribution agreement with a Saudi Arabian vendor involved many of the country’s major infrastructure and mining projects.
As part of the deal, Tamgo will market, sell or lease the firm’s generators to countries such as the United Arab Emirates, Qatar and Kazakhstan. Shares soared 9.5 per cent, or 1.44p, to 16.68p.
Property services firm Belvoir said a strong performance in its lettings business helped offset a slump in housing sales. Revenue rose 3 per cent to £15.9million in the first six months of 2023 while profit was up by a tenth to £4.4million.
The company increased its interim dividend by a quarter to 5p a share. Shares gained 3.9 per cent, or 8.5p, to 228.5p.
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