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MARKET REPORT: Johnson Matthey soars after US giant buys stake

MARKET REPORT: Shares in Johnson Matthey have one of their best days in decades after American industrial giant buys stake in group

Shares in Johnson Matthey had one of their best days in decades after an American industrial giant bought a stake in the group. 

The stock soared after New York-based Standard Industries snapped up over 5 per cent of the FTSE 250 chemicals firm, which makes products including catalytic converters used in cars.

The investment ignited rumours of a possible takeover, with broker Jefferies saying Standard Industries could be ‘the ideal owner’ for Johnson Matthey. 

On the up: The stock soared after New York-based Standard Industries snapped up over 5 per cent of the FTSE 250 chemicals firm

Analysts noted that the US firm had a record of investing in chemicals globally and had purchased WR Grace & Co, a Maryland firm, for a 74 per cent premium last year. 

Jefferies said Grace had ‘overlap’, which could help get a potential acquisition past regulators. 

The stock eventually closed up 18.9 per cent, or 353.5p, at 2225p. 

Johnson Matthey, before the news of the stake was trading around 42 per cent lower than it was 12 months ago. The shares plunged last November when it announced plans to leave the battery materials business after admitting the possible returns from the division would not justify the needed investment. That shocked the market as it came mere months after Business Secretary Kwasi Kwarteng opened its battery technology centre in Oxford. 

The group was unable to find a buyer and announced in January that it would shut the operation, costing over 400 jobs. 

The FTSE 100 inched up 0.5 per cent, or 35.36 points, to 7544.55 while the FTSE 250 added 0.4 per cent, or 89.09 points, to 20,708.71. April was set to be the worst month in two years for stocks as inflation, war in Ukraine, lockdowns in China and fears of an economic slowdown hit markets. 

Global stocks were expected to lose nearly 6 per cent of their value in April, their worst performance since March 2020. The Footsie remained positive and was up just over 0.5 per cent in the year-to-date. The FTSE 250 had fared much worse, down 13 per cent since the start of 2022. 

UK equities were helped by a weak pound, which suffered its sharpest monthly fall against the dollar since October 2016. 

MARKET REPORT: Johnson Matthey soars after US giant buys stake

Oil giant Shell dipped 0.6 per cent, or 12p, to 2173p after it snapped up Sprng Energy, an Indian renewable energy group, for £1.2billion. The deal triples Shell’s renewable capacity as it looks to accelerate transition towards green energy. 

Pharmaceutical group Hikma was down 7.2 per cent, or 145.5p, to 1883.5p – after noting a slow start to the year for its generic drugs. 

Education group Pearson gained 1.9 per cent, or 14.8p, to 785.8p. The FTSE 100 firm reported a sales rise thanks to growth across most of its business lines. It also remained on track to hit its targets for the entire year. 

Insulation and roofing specialist Sig surged 13.2 per cent, or 4.85p, to 41.6p as it said performance for 2022 would be ‘significantly ahead’ of previous expectations after reporting sales growth of 25 per cent year-on-year for the three months to the end of March. 

Vodafone fell 4.3 per cent, or 5.5p, to 121.54p after a downgrade from Bank of America, which lowered its rating on the telecoms giant to ‘neutral’ from ‘buy’, and cut the target price to 148p from 188p. The assessment also appeared to have affected rival BT which fell 1.1 per cent, or 1.95p, to 177.35p. 

Advertising agency M&C Saatchi jumped 8.9 per cent, or 16p, to 195p as it announced plans to resume dividend payments after it reported a pre-tax profit for the year of £21.6m, swinging from an £8.5m loss in 2020, with revenue up 11 per cent to £249m. 

The results may be enough to fend off tech entrepreneur Vin Murria, who is targeting it with a takeover offer.

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