FTSE 100 (FTSEINDICES: ^FTSE) has opened 25 points lower at 6,759 this morning on a day when no blue-chip companies reported earnings updates. For the week the index is down 42 points at the time of writing, having failed to fully recover from Monday’s 127 point tumble.
Investors will be hoping for welcome news from fresh US jobs data which should provide some ideas as to the market’s short term direction.
This week, the shares worth owning were a blue-chip insurer, the newest addition to the FTSE 100 and an under-the-radar pharmaceutical company with good growth prospects:
Aviva
Shares in Aviva (LSE: AV) (NYSE: AV.US) are up 7% this week to 505p making it the blue-chip with the most momentum since began this week. The firm’s new chief executive, Mark Wilson, who joined 14 months ago, has overseen a successful turnaround but he warns there is still a way to go: ” I want to guard against complacency. Aviva still has issues to address. Have we made progress? Yes, some. Is it a little faster than anticipated? Probably. Have we unlocked the full potential at Aviva? Not yet.”
So, while yesterday’s financial report offered the market enough cheer — £2.2bn profit after a loss in 2012, with a significant reduction on a troublesome intercompany loan — Wilson also excited investors through his sheer determination to do more.
The results so far have certainly been impressive and the share price is up 60% on this time last year.
Barratt Developments
The homebuilder Barrat Developments (LSE: BDEV) rejoined the FTSE 100 this week after dropping out seven years ago. The firm is joined by wealth management group St. James’s Place, while Tate & Lyle, the sugar company, and engineering group AMEC drop out.
The buoyant UK housing market has seen Barratt’s share price surge more than 200% in the last two years. Improving consumer confidence and cheap mortgages have spiked demand for new homes.
Shares in Barratt are up 5% on the previous week, hitting a five year high of 449p, while the shares presently trade on a price/earnings ratio of 16.
Hikma Pharmaceuticals
The share price of Hikma Pharmaceuticals (LSE: HIK) is up 5% on last week and the company’s shares are performing well so far this year — gaining 25% since the beginning of January.
The firm, with some 800 products on the market, is only the UK’s fourth largest drugs company, but has the potential for superior earnings growth compared with some of the more well-known pharma giants. City experts believe Hikma’s earnings will have hiked almost 90% in the company’s final results, due to be announced next week. With a price of 1,496p the shares may trade on a price/earnings ratio of 22.
