FTSE 100 movers: BT surges; JD Sports hit by downgrade

12th Aug 2024 13:51

(Sharecast News) - London's FTSE 100 was up 0.5% at 8,209.23 in afternoon trade on Monday.

BT Group surged to the top of the index after Bharti Global bought Altice UK's 24.5% stake in the telecoms company.

"We welcome investors who recognise the long-term value of our business, and this scale of investment from Bharti Global is a great vote of confidence in the future of BT Group and our strategy," BT boss Alison Kirkby said.

Russ Mould, investment director at AJ Bell, said: "The news Indian telecoms firm Bharti is taking a major stake in BT is reflective of a big power shift between the two companies. Around the turn of the millennium, it was BT which had a substantial holding in Bharti, as well as two seats on its board.

"Bharti is buying its stake from French telecoms tycoon Patrick Drahi's vehicle, Altice, and the news will likely be greeted with some relief by shareholders as it holds the promise of a bit more stability.

"Drahi has been selling assets to pay down debt so his stake in BT represented a significant overhang on the shares.

"This situation won't be resolved overnight given Bharti is acquiring the stake in two tranches, with the second tranche dependent on regulatory clearance. Inevitably there will be speculation about what Bharti intends to do with its stake but, for now, it is ruling out any bid for BT.

"Investors are not able to extrapolate anything about valuation either given the price Bharti is paying has not been disclosed.

"Management will be glad to hear Bharti are supportive of the company's current strategy, although clearly they will want to see evidence of progress that can revive a share price which has gone nowhere in the last five years."

JD Sports was under the cosh after Deutsche Bank downgraded the shares to 'sell' from 'hold' and cut the price target to 110p from 115p.

DB said its updated forecasts sit 6.5% below the bottom of the guided range and it views the current free cash flow yield premium to peers JD is trading on as unwarranted.

"We expect FY25e organic revenue growth of +6%, the bottom of the guided range but with flat LFL (guided 1-4%) resulting in lower drop-through," it said.

"Whilst we see potential for positive surprise in gross margin, as promotional intensity eases, subdued overall category spend tampers our enthusiasm."

FTSE 100 - Risers

BT Group (BT.A) 139.75p 7.09%

Centrica (CNA) 126.45p 2.60%

Standard Chartered (STAN) 726.80p 1.59%

Diploma (DPLM) 4,180.00p 1.36%

Marks & Spencer Group (MKS) 323.10p 1.35%

Barclays (BARC) 221.08p 1.29%

Legal & General Group (LGEN) 227.20p 1.25%

Vodafone Group (VOD) 74.68p 1.19%

Spirax Group (SPX) 7,750.00p 1.17%

BP (BP.) 438.80p 1.16%

FTSE 100 - Fallers

JD Sports Fashion (JD.) 120.80p -3.71%

B&M European Value Retail S.A. (DI) (BME) 448.60p -1.34%

Hikma Pharmaceuticals (HIK) 2,012.00p -1.28%

Frasers Group (FRAS) 832.00p -1.19%

Burberry Group (BRBY) 676.80p -1.17%

Whitbread (WTB) 2,823.00p -1.12%

Pershing Square Holdings Ltd NPV (PSH) 3,530.00p -0.90%

Pearson (PSON) 1,035.00p -0.67%

Airtel Africa (AAF) 110.00p -0.63%

Scottish Mortgage Inv Trust (SMT) 820.80p -0.63%