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Ian Lyall Published 07:22 Updated 09:14 Highlights FTSE 100 flat at 10,492 BT swoops for TalkTalk; Citi unimpressed National Grid reassures 09:11 Broker not impressed by TalkTalk deal Citi, the US bank, says taking over TalkTalk would have a limited impact on BT Group's financials, and it is surprised that BT's shares have risen on the prospect. The broker, which rates BT at 'sell' with a target price of 165p, wrote before the deal was confirmed. It calculates that buying the broadband provider could lift BT's revenue and EBITDA (earnings before interest, tax, depreciation and amortisation) by 1% to 2%.
The deal would initially dilute normalised free cash flow, the cash left after investment, though Citi sees scope for it to turn mildly accretive over the longer term as synergies come through. 08:29 Deflating start The FTSE 100, after briefly nudging into the green, fell back to parity on a slow day for corporate news flow. Thankfully, the bond market seems to have calmed down. The day's big headline was the takeover of TalkTalk by BT Group in a £400 million deal.
National Grid's trading update reassured, while Ithaca Energy, which topped the top division, has swooped to acquire oil assets in Canada. 07:20 Bright start predicted The FTSE 100 is poised to open 54 points higher, with London catching the tailwind from a buoyant start to the week across Asia. The good cheer traces back to Friday's US jobs report, which came in softer than hoped. Fewer workers, cooler wage growth, and suddenly the odds of an October rate hike from the Federal Reserve have slipped below one in four.
Bond markets took the hint as the 10-year Treasury yield eased to 5.25%; some relief after weeks of relentless selling. In Asia, Japan's Nikkei 225 jumped 2.6% as tech led the charge, though China and South Korea sat it out for public holidays. Wall Street, fresh off a record close for the Nasdaq 100, looks set to add more.
Oil is the fly in the ointment, with Brent slipping back towards $101 as traders weigh fresh conflict in Yemen.
Source: Proactive Investors
