Market report: BT rises on Ofcom broadband pledge

Louis Ashworth
·2-min read
BT
BT

Investors sent BT shares up after the communications regulator reaffirmed its support for upgrading the nation to gigabit-speed broadband.

The telecoms giant rose 8.1p to 134.45p in the wake of a speech by Ofcom boss Melanie Dawes, who promised not to introduce price control on fibre broadband “until at least 2031”.

Ofcom is laying the groundwork for a new regime from March next year, which will allow BT’s broadband builder Openreach to increase wholesale prices for rivals.

That will hand Openreach certainty it can make a return on the £12bn it plans to sink into kitting out the nation with gigabit-speed broadband.

Ms Dawes said “every investment carries some uncertainty” and it was right that broadband builders were “compensated for accepting that risk”.

The jump left BT as one of London’s biggest blue-chip risers on a day of moderate gains for the FTSE 100, which outperformed as bourses across the continent registered narrow losses.

The index shrugged off a recovery in the pound, which hit a 12-month high on Brexit hopes and a sustained slide in the dollar’s strength.

Shares in Rolls-Royce, one of the pandemic’s biggest losers, surged 18.15p to 134.90p – the benchmark’s strongest gains – as airline Ryanair said it was placing an order for 75 Boeing 737 Max aircraft.

The aircraft – which was suspended from service after two fatal accidents – is expected to return over the coming months.

In a separate interview, the engine-maker’s technology chief Simon Burr said the pandemic offered the group a chance to focus on development and new technologies – possibly giving it an opportunity to re-enter the narrow-body jetliner market.

“We don’t rule ourselves out of any part of the market today because evolution in the 2020s could be really quite exciting,” he told Bloomberg.

The group’s shares are down almost 50pc this year, having recovered strongly during the autumn.

Miners rose solidly, with Anglo American climbing 98.5p to £24.77 and Rio Tinto up 142p to £53.81, as the price of iron touched a seven-year high on supply shortfalls.

The metal’s price was boosted by a production report from Brazilian miner Vale, which released production that fell short of expectations.

Royal Bank of Canada analyst Tyler Broda said a looming deficit in iron ore, as well as the risk of 2021 as a La Nina year, would keep the market in a “tight” position over the coming six months, driving prices higher. “This should benefit all iron ore producers,” he wrote.

On the FTSE 250, shares in gold miner Hochschild Mining plunged 29.80p to 207p after the investment vehicle of chairman Eduardo Hochschild sold off a 12pc stake in the company at 200p apiece for £123m in total – a 16pc discount to Wednesday’s closing price. His overall stake in the company now stands at 38pc.