Commodity stocks support modest rise for FTSE 100

Aberdeen Asset Management was a laggard on Tuesday on fears it had been missing out on China's bull market.

Having started the week at a record high, Aberdeen slipped 2.5 per cent to 493.8p. The stock has followed Hong Kong asset managers sharply higher this month, which analysts have pinned on Chinese investors hunting offshore for better value.

But Aberdeen's key Global, Asia-Pacific and Emerging Market equities funds have been underperforming their benchmarks over most periods, RBC said. These high-margin funds account for a third of its assets under management, but are estimated to provide more than 60 per cent of group revenue, the broker said.

RBC forecast Aberdeen to have suffered £4.8bn of net outflows in the quarter to March, with rising equity outflows pressuring margins and no improvement expected for at least another quarter.

Yet while Aberdeen is valued close to par with its peer group, "a company that is experiencing downgrades in an upgrade environment and has a cautious outlook, should at least trade at a 15 per cent discount to sector averages," RBC said.

Commodity stocks helped the wider market edge higher on thin volume as oil rose for a fourth day. The FTSE 100 added 10.96 points to 7,075.26, up 0.2 per cent, as shale pumpmaker Weir rose 5.1 per cent to £18.80.

Tullow Oil jumped 8.5 per cent to 368.6p after Citigroup turned positive in a sector review.

"Concerns around Tullow's balance sheet and timing of the TEN development [offshore Ghana] are more than discounted in the current valuation with the shares trading below our core net asset value of 354p," Citi said. The quality of Tullow's development projects justifies the current share price even if all exploration and appraisal prospects are valued at zero, the broker argued.

Barclays took on 1 per cent to 262.2p after JPMorgan's quarterly results showed a bounceback for investment banking revenue. Standard Chartered fell 2 per cent to £10.84 after JPMorgan highlighted weaker demand for trade finance in Asia.

Spire Healthcare dropped 10.1 per cent to 330p after Cinven, which had floated the hospital operator in July at 210p a share, sold a further 10 per cent stake at 340p apiece. Sector peer Al Noor Hospitals fell 8.8 per cent to 905p after Ithmar Capital sought to sell its entire 20 per cent stake.

Supergroup, the fashion retailer, gained 4 per cent to £10 on the back of "buy" advice from Berenberg. Strength in Germany suggested Europe alone could add 32 per cent to group revenues by 2019, with the buyback of brand rights in North America providing further reassurance about SuperGroup's international growth potential, it said.

GW Pharmaceuticals hit a record high, up 4.9 per cent to 587p, after trial results published by the American Academy of Neurology suggested its cannabis oil reduced seizures suffered by epilepsy patients by more than half. GW shares have risen 11-fold since the company took a Nasdaq listing in 2013.

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