Home Commodities FTSE 100 gains on stronger commodities and Unilever activist investor action

FTSE 100 gains on stronger commodities and Unilever activist investor action

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The FTSE 100 was up on Tuesday after the EU announced a ban on the bulk of Russian oil, and the Netherlands’ supply of Russian gas was cut off after the country refused to pay for supplies in Roubles.

Mining firms rose higher as easing Covid-19 restrictions in China saw the reopening of economic hubs and an increase in commodities demand.

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Anglo American shares gained 1.6% to 3,914p, Antofagasta saw an uptick of 1.7% to 1,545p, Rio Tinto increased 1.5% to 5,825p and Glencore rose 0.7% to 530.3p.

Meanwhile, the price of oil climbed higher beyond the $120 mark, with Brent Crude at $123 per barrel as Russia’s spear-rattling drove scarcity fears across Europe.

Shell shares increased 1.2% to 2,403p and BP shares rose 1.3% to 439.3p as a result of the rising oil prices.

Unilever soared over 8% following its decision to give Trian Fund Management CEO and billionaire activist Nelson Peltz a seat on its board. Trian-managed funds currently have a 1.5% stake in Unilever, amounting to 37.4 million shares.

“We have held extensive and constructive discussions with [Nelson] and the Trian team and believe that Nelson’s experience in the global consumer goods industry will be of value to Unilever as we continue to drive the performance of our business,” said Unilever Chair Nils Andersen.

Mould commented: “Unilever has given in to the pressure and handed activist investor Nelson Peltz a seat on its board.”

“The consumer goods firm has been struggling in the wake of the failed takeover of GSK Consumer Health and investors have welcomed the move warmly.”

GSK shares were up 0.2% to 1,732p on the report that it had acquired US biopharmaceutical group Affinivax for up to $3.3 billion in a move to expand its vaccines pipeline going forward in 2022.

“The proposed acquisition further strengthens our vaccines R&D pipeline, provides access to a new, potentially disruptive technology, and broadens GSK’s existing scientific footprint in the Boston area,” said GSK Chief Scientific Officer Hal Barron.

B&M shares tumbled 11.2% to 406.9p on the back of poor FY 2022 results, with a 2.7% decrease in total group revenues to £4.6 billion compared to £4.8 billion the last year, and warnings over inflationary pressures on the retailer’s FY 2023 profits.

The announcement of CFO Alex Russo as the new CEO did little to calm investor nerves as the stock dropped.

“The retail industry is facing inflationary pressures whilst our customers are having to cope with a significant increase in the cost of living, making spending behaviour in the year ahead difficult to predict,” said departing CEO Simon Arora.

B&M commented that it aimed to drive customer growth using its discount offerings as the cost of living continues to rain down blows on retail groups in FY 2022-2023.

“Longer term there looks a decent chance B&M can emerge from the current cost of living crisis in better shape than it entered it,” said Mould.”

“The company enjoys the kind of scale, allied with a strong balance sheet, which should help see it through tough times and come out the other side with its market position bolstered.”

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