FTSE follows downbeat lead after Bank Holiday, while Saga finds a white knight

“The FTSE 100 was nursing a hangover after the Bank Holiday as it caught up with yesterday’s downbeat sentiment in the US and Europe and fell further from the 6,000 level it held for much of the summer," says AJ Bell investment director Russ Mould.

“Europe appeared to have moved on from its Monday blues as it reacted to a positive update on Chinese manufacturing, something which gave a lift to UK-listed miners.

“Oil was also higher on the news with Brent Crude firming above $45 per barrel. Gold shone as it moved back in the direction of the $2,000 per ounce mark.

“Not helping the FTSE’s cause was strength in sterling relative to the dollar, a currency move which impacts the relative weight of the overseas earnings which dominate the index.” 

Saga

“Typically white knights only exist in fairy tales but over-50s travel and insurance group Saga seems to have found one in real life to ride to its rescue.

“The decision by its former owner Sir Roger de Haan to invest £100 million at a big premium to a depressed share price has created hope that the company can claw its way out of a hole partly of its own making but exacerbated by the coronavirus crisis.

“It should prove a better outcome for investors than the 33p takeover offer recently tabled (and subsequently rejected) by a pair of US investors. De Haan is invested both financially and emotionally in the business, given it was founded by his father more than 70 years ago. His decision to return to the board as chairman should be taken positively by the market.

“Saga remains in a very tricky place, it has no certainty on when normal service will resume in the travel business, and it will still be saddled with debt, partly associated with its ill-timed launch of two purpose-built cruise ships.

“If Saga can steer a course through the current choppy waters one can understand why the proposition might have some merit, given demographic trends should create an increasingly large pool of prospective customers.

“However, like many businesses, Saga still doesn’t know exactly how a post-Covid future will look.”

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