Market Report: Genel Energy starts to gush on bond buyback

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Tony Hayward may be looking forward to a pint or two tonight.

The former BP boss got a rare bit of good news in the form of a chunky rise in the shares of the Kurdistan oil firm Genel Energy he founded with Nat Rothschild.

It came after struggling Genel announced a plan to join the likes of Deutsche Bank and Anglo American in the club of European companies buying back their bonds.

The explorer, which last month revealed a $1 billion (£697 million) writedown on the value of its Taq Taq oilfield, said it would buy back some of its only outstanding bond, a  $730 million issue that is trading at about half its face value.

It meant investors ignored what analysts described as “disappointing news” that reserves at its Tawke oil field had decreased and sent the shares 10p, or more than 12%, higher to 89.25p.


Breathing space: Tony Hayward (Picture: Getty Images)

Things couldn’t have been more different for fellow Kurdistan-focused oil firm Gulf Keystone Petroleum, which after admitting it was in danger of sinking under its huge debts, shed 1.4p, or almost 15%, to 8.04p.

On the FTSE 100, things were a little more subdued despite Wall Street and Asian markets having hit 2016 highs in their last sessions.

With little around to spark enthusiasm, traders in London could only get Britain’s blue-chip index 10.76 points higher at 6211.92, albeit close to its 2016 peak.

Banks were among the winners, Standard Chartered claiming the top spot with a 30.5p rise to 489.55p and Lloyds close behind, gaining 1.39p to reach 70.69p.

The weak US dollar pushing prices of commodities gave the likes of Glencore, up 2p at 160p, and BHP Billiton, 6.9p higher at 828.8p, a leg-up.

But investors, evidently feeling in a riskier mood, weren’t tempted by gold, sending Randgold Resources and Fresnillo down 17p at 990p and 4.5p at 533p to the bottom of the blue-chip leaderboard. Copper miner Antofagasta suffered a 4.5p loss to 533p. 


George Osborne announced a tax on sugary drinks like Coca Cola (Picture: Reuters)

Associated British Foods seemed to leave the worries over the impending sugar tax behind it by confirming it remained in talks to buy South Africa’s Illovo Sugar. ABF sweetened 23p to 3401p.

On the FTSE 250, retailer Debenhams was among the day’s losers, dropping 1.85p to 74.4p after Investec cut its rating on the stock to sell.

Frankie & Benny’s owner The Restaurant Group fared better, with a 4.5p rise to 399.6p, following the appointment of former Spirit Pub Company chief Mike Tye as a non-executive director.

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March 19, 2016 |
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