UK stocks rise as financial shares gain on M&A reports

LONDON: Britain’s FTSE 100 was on course for its best day in nearly a month on Monday, as financial stocks benefited from reports of a possible Commerzbank-Deutsche Bank merger, while mid-cap banks Charter Court and OneSavings also gained on deal talks.

The FTSE 100 advanced 1 per cent and the FTSE 250 was 0.4 per cent higher by 0941 GMT. Ireland’s main index, seen as a gauge of Brexit nervousness, underperformed European stocks and was down 0.1 per cent.

An index of financial stocks was on track for its best day in almost a month after a source told Reuters on Saturday that Deutsche Bank’s board had agreed to hold talks with rival Commerzbank on the feasibility of a merger.

British Airways owner IAG added 1.2 per cent after a Citigroup rating upgrade.

The FTSE 250 saw some steep moves with OneSavings surging 9.8 per cent after talks with fellow challenger bank Charter Court Financial Services regarding a possible merger, which analysts at Investec called “a marriage made in heaven”. “Although both OSB and Charter Court offer excellent performance metrics on a stand-alone basis, we believe that the combination should prove materially value-enhancing for both sets of shareholders,” Investec analysts wrote.

The rise placed OneSavings on course for its biggest one-day gain since August 2016 and Charter Court Financial jumped 9.1 per cent on track for its best-ever day.

Reuters