By Carla Mozee, MarketWatch
LONDON (MarketWatch) -- TUI Travel PLC cruised higher Thursday,
nearly topping the FTSE 100 benchmark, after its majority
shareholder issued an upbeat profit outlook.
TUI Travel shares climbed 2.2% after German-listed TUI AG said
growth in full-year earnings before interest, taxes and
amortization should come in "at least at the upper end" of its
forecast. Growth for underlying profit is being targeted at 6% to
12%.
TUI AG said growth at TUI Travel's hotels & resorts and
cruises segments and strength in the key German and U.K. markets
contributed to an 89% rise in group underlying profit to 163
million euros ($218.33 million) in the third quarter. TUI Travel in
June agreed to merge with TUI AG, its biggest shareholder, in an
all-stock deal that TUI AG said remains on track.
Shares of cruise operator Carnival PLC also rose, by 0.4%.
The FTSE 100 gained 0.4% to 6,685.26 after a flat start to the
session. The benchmark added 0.4% on Wednesday, boosted by fading
prospects of an early interest-rate increase by the Bank of
England.
On Thursday, a ratings upgrade for British Land Co. to buy at
Bank of America Merrill Lynch pushed shares of the property
investment firm 2.5% higher.
Also advancing were shares of banking firm HSBC and Royal Mail
PLC , by 2.1% and 1.7%, respectively.
But shares of Glencore PLC fell 1.3% following a downgrade to
neutral from outperform at Credit Suisse, which cited fading
momentum and valuation as reason for the move.
On the FTSE 250 index, shares in Carillion PLC jumped 8.4% after
the construction and support services firm laid out its business
plan for a merger with Balfour Beatty , signaling it is still
pursuing the deal. Shares in Balfour Beatty rose 1.5%.
Carillion has now outlined "a credible road map on the merger
and how it would achieve the GBP175 million reduction in the cost
base and the associated costs. Balfour Beatty's board talks about a
series of theoretical cost reduction opportunities," said Investec
Securities analyst Andrew Gibb in a note to clients Thursday.
"A standalone Balfour Beatty does not look attractive, the
Carillion deal does," he wrote.
In the currency market, the pound (GBPUSD) bought $1.6691, down
from $1.6695 late Wednesday.
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