MARKET REPORT: Tourism shares fly after talk of freer transatlantic travel between Europe and the US boosts hopes
Talk of freer transatlantic travel between Europe and the US boosted British Airways-owner IAG and ailing plane engine maker Rolls-Royce.
The FTSE 100 groups and a host of other tourism stocks rose after Ursula von der Leyen, president of the European Commission, said on Sunday that Americans who have been vaccinated against Covid should be able to travel to Europe by the summer.
This was a surprise to some, who may have thought this was too early given that the EU’s own vaccine programme is lagging behind that of the US and the UK.
IAG and Rolls-Royce rose after EC president Ursula von der Leyen said that Americans who have been vaccinated against Covid should be able to travel to Europe by the summer
But London-listed firms were given an extra boost after BA boss Sean Doyle said there was a ‘great opportunity’ for Britain and America to set up a transatlantic travel corridor, given the strength of both immunisation programmes.
BA would be one of the main beneficiaries of freer movement between the two nations as it is one of the key carriers on the London to New York route – the most lucrative in the world. Rolls would also stand to make big gains as it makes engines for large aircraft that fly long-haul routes.
Stock Watch – Blackbird
Eighteen more US TV stations have signed up to using Blackbird’s online video editing platform.
A total of 69 stations across 35 states are using the AIM-listed group’s Town News service, which is in the cloud.
This means staff from multiple locations can edit news videos remotely and quickly publish them on websites and social media.
Around 43 per cent of US adults are estimated to source their news online or on social networks. Shares rose 5.2 per cent, or 1.25p, to 25.5p.
It is paid for the number of hours its engines fly and will miss out on much of the boom in short-haul European travel this summer.
This will restart for Britons from May 17, though details such as a ‘traffic light’ system have yet to be firmed up.
IAG rose 4.2 per cent, or 8.26p, to 205p, while Rolls added 6 per cent, or 6.06p, to 107.82p, and even Europe-focused Easyjet climbed 4.3 per cent, or 42.1p, to 1028.5p.
The rally among travel stocks nudged the FTSE 100 higher by 0.4 per cent, or 24.56 points, to 6963.12, while the FTSE 250 rose 0.9 per cent, or 205.08 points, to 22577.34.
Engineering group IMI started the week with a bang and rose to the top of the mid-cap leaderboard after it told investors it would smash profit estimates.
The heating and cooling system-designer jumped 11.1 per cent, or 155p, to 1552p, after it said trading was strong in all its major markets and it had sped up a cost-cutting programme that will help it save £22million this year.
It also launched a £200million share buyback programme – which will pay investors to buy their stock.
IMI’s scheme takes the total value of share buybacks announced in the UK this year to more than £4billion, according to AJ Bell’s investment director Russ Mould.
A majority of Aggreko shareholders gave the all-clear to a £2.3billion takeover by TDR Capital and I Squared Capital.
The FTSE 250 firm – which provides portable power generators and air conditioning units to everything from mines to Glastonbury Festival and the Olympics – has become the latest in a string of London-listed companies to be snapped up by private equity firms.
Aggreko’s bosses backed the 880p per share offer last month. Shares rose 1.1 per cent, or 9p, to 862p after the vote cleared last night.
Elsewhere, You Gov and Unilever were conducting takeovers of their own.
Pollster You Gov acquired a finance start-up called Lean App for an undisclosed sum.
The deal will give You Gov access to a slew of financial data its clients can use to understand consumer behaviour. Its stock closed up 3 per cent, or 30p, to 1045p.
And Unilever (down 0.7 per cent, or 27.5p, to 4086p) made another move into the lucrative health and nutrition market, buying US-based food supplement group Onnit.
It will join Unilever’s vast stable of brands, which includes Cif, Ben & Jerry’s and Dove.
Food ingredients maker Tate & Lyle was also on a health push, rising 5.9 per cent, or 44.8p, to 801.8p, after confirming a break up is on the cards.
It is mulling the possibility of selling a controlling stake in its sweeteners division, which makes high-fructose corn syrups.