Markets: Iraqi oil field sale pushes Heritage

By PETER RANSCOMBE
Published on 21/08/2012 19:11

HERITAGE Oil soared to the top of the risers’ board on Tuesday after selling a stake in one of its Iraqi oil fields to fund developments in Nigeria and avoid a giant rights issue.

Shares in the FTSE 250 driller jumped 22 per cent or 36.9p to close at 205p after it agreed to sell a 26 per cent stake in its Miran block in Kurdistan for $156 million (£99m) to Genel Energy, the investment vehicle set up by former BP chief executive Tony Hayward and financier Nat Rothschild. Genel will also lend Heritage $294m, allowing the driller to avoid a proposed $370m rights issue to fund its $850m purchase of a stake in several Nigerian oil fields. While the deal cheered Heritage’s investors, Genel headed in the opposite direction, down 2p at 700p.

Shares in credit card insurer CPP Group plunged 23 per cent or 11.5p to 38.25p after the firm revealed it was setting aside more cash to deal with a Financial Services Authority (FSA) investigation into how it renews policies for its customers. CPP’s shares were temporarily suspended in February following the launch of the FSA probe.

In the FTSE 100, miners were in demand following speculation that the European Central Bank (ECB) will step in to buy the government bonds issued by struggling eurozone nations. Talk of a move by the ECB reassured the markets and drove investors towards riskier assets, such as mining stocks.

But Mike McCudden, head of derivatives at Interactive Investor, warned: “Equities are being blown around on thin volumes.”

Silver miner Fresnillo was the biggest riser – up 5.8 per cent or 87p at 1,581p – closely followed by Vedanta Resources, which rose 4.5 per cent or 41.5p at 966.5p, and Polymetal International, which was up 40p or 4.3 per cent at 967p.

NEW YORK: Wall Street barely budged, trimming early gains after the Standard & Poor’s 500 index hit a four-year high on hopes that central banks will act in the near future to stimulate the global economy.

The Dow Jones industrial average dipped 7.86 points, or 0.06 per cent, to 13,263.78 while the broader S&P 500 inched up 0.98 of a point, or 0.07 per cent, to 1,419.11.

The Nasdaq Composite Index slipped 3.89 points, or 0.13 per cent, to 3,072.32.