Eland aims to prosper after flotation

SHARES in Aberdeen-based Eland Oil & Gas got off to a strong start yesterday as it made its debut on the Alternative Investment Market.

The company, which plans to restart production on wells in Nigeria, saw its stock rise by 8.5p on its initial price of 100p a share. It successfully raised £118 million, making it the largest flotation on Aim in more than three years. The company ended the day with a market capitalisation of £146 million.

Increased optimism that central bankers will pull the trigger on further emergency support measures ensured a robust performance on the wider London market. The FTSE 100 Index closed 46.9 points or 0.8 per cent higher at 5,758.4.

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Yusuf Heusen, sales trader at IG Index, said: “Yet more weak manufacturing data from the eurozone was shrugged off, as investors look toward Thursday’s ECB meeting, when Mario Draghi is expected to unveil something impressive to stem the eurozone crisis.”

The hoped-for boost from central bankers ensured commodity-based stocks were at the forefront of the improvement in London, with silver miner Fresnillo up by 4 per cent or 66p to 1,627p and Kazakhmys 17p higher at 610p.

Supermarket chain Morrisons was a top flight casualty as the City took a pessimistic view of half-year results due on Thursday. With the company feeling the pressure of discounting by rivals, profits for the six months to July are due to fall 2 per cent to £434 million. Shares were 1.8p lower at 278.2p.

Insurer Admiral was down 3 per cent or 36p to 1,150p after Credit Suisse questioned whether there was further scope for growth in the stock after a recent strong run. Downgrading its target price to 1,250p a share, the City firm also said near-term conditions were likely to be constrained by pressure on vehicle count growth and industry pricing trends.

It was a similar story at chip designer Arm Holdings after Deutsche Bank said it expected the Cambridge-based company’s recently strong earnings per share growth to slow to the mid-teens. Shares were 14.5p lower at 559.5p.

US markets were closed yesterday for the Labor Day national holiday.