U.K. Stocks Rise as Vodafone, RBS Shares Advance

U.K. stocks rose, with the FTSE 100 (UKX) Index making its biggest weekly gain this year, as Vodafone Group Plc and Royal Bank of Scotland Group Plc (RBS) climbed.

Vodafone advanced 3 percent as UBS AG said the mobile-phone operator may become more attractive to a potential bidder after the sale of its stake in Verizon Wireless. RBS added 1.2 percent following a report that the lender plans to reduce its workforce by a quarter. Informa Plc (INF) gained 2.3 percent after its new chief executive officer said the company can simplify its operating structure and use its scale more effectively.

The FTSE 100 added 25.07 points, or 0.4 percent, to 6,838.06 at the close in London. The benchmark has risen 2.6 percent this week as Vodafone (VOD) rallied and real estate companies gained after asking prices for British homes jumped at the fastest rate since 2007. The FTSE All-Share Index also advanced 0.4 percent today, while Ireland’s ISEQ Index added 0.3 percent.

“For Vodafone, the inevitable AT&T speculation is bound to resurface and there have even been whispers of a Verizon approach in due course once the current deal is fully completed,” Richard Hunter, head of equities at Hargreaves Lansdown Plc in London, wrote in an e-mail. “Elsewhere, the reported further streamlining of RBS has been well received ahead of its full-year numbers next week.”

Vodafone advanced 3 percent to 236.5 pence. Europe’s largest mobile-phone company will reveal how much cash it will pay to shareholders for the stake sale after the close of trading today.

Vodafone Climbs

UBS said the telecommunications company’s diverse businesses, financial flexibility and investment program may make it attractive to a potential bidder such as AT&T Inc. Under rules set by the U.K.’s Takeover Panel, the American phone company lost the right to bid for Vodafone for six months when it issued a statement on Jan. 27, saying that it does not intend to make an offer.

RBS rose 1.2 percent to 360.1 pence. The government-owned lender will cut its 120,000-person workforce by a quarter over the next few years, the Financial Times reported late yesterday, citing people it didn’t identify. The bank will also announce a plan to withdraw from some of its investment-banking activities and its international businesses next week, the report said.

Informa climbed 2.3 percent to 534 pence. CEO Stephen Carter also said that the publishing company can use technology more intensively, according to a statement.

InterContinental Hotels

InterContinental Hotels Group Plc (IHG) retreated 2.5 percent to 1,925 pence. Credit Suisse Group AG downgraded the world’s largest provider of hotel rooms to underperform from neutral, meaning that investors should sell the shares.

The brokerage said that competitors of the owner of the Holiday Inn chain have increased their number of rooms and their fees at a faster rate than InterContinental.

IMI Plc (IMI) slid 2.5 percent to 1,526 pence. Exane BNP Paribas downgraded the engineering company to underperform from outperform. The brokerage said that the new CEO will struggle to increase sales without putting pressure on margins.

A report from the Office for National Statistics showed that U.K. retail sales including fuel decreased 1.5 percent last month, a bigger drop than the 1 percent that economists had forecast. The ONS revised the increase in sales in December to 2.5 percent from 2.6 percent.

Home Retail Group Plc (HOME), which owns the Argos chain of catalog shops, declined 1.2 percent to 189 pence. Dixons Retail Plc (DXNS), which sells electronics products, slipped 0.9 percent to 47.2 pence.

To contact the reporter on this story: Jonathan Morgan in Frankfurt at jmorgan157@bloomberg.net

To contact the editor responsible for this story: Cecile Vannucci at cvannucci1@bloomberg.net

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