L&G leads risers on talk of recovery

By Bryce Elder and Neil Hume

Legal & General was the top performer in a weak London market on Monday.

The insurer led the blue-chip risers after Credit Suisse said takeover speculation could return as solvency concerns eased.

Capital rules for insurers, known as Solvency II, were likely to be watered down this year as talks progressed to the European Commission and political influences were brought to bear, Credit Suisse’s team said.

“It is difficult to see L&G as a bid target at the moment given the uncertainty over Solvency II that remains,” the broker said.

“If Solvency II starts to move in the right direction and acquirers gain confidence in the outcome, then this view could change.”

L&G rose 3.7 per cent to 79p after Credit Suisse moved to “outperform” in a sector review.

The group has been mooted as a possible target for Resolution, off 0.5 per cent to 80p, though analysts doubt an annuity writer is on its shopping list.

The market struggled for direction in a quiet day for news, with the FTSE 100 closing down 42.6 points or 0.8 per cent at 5,260.31.

It was a fourth straight decline for the benchmark, which has not registered a five-day losing streak since February.

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