Private Investor: Take a deep breath and jump into the takeover scene

Another week, another four- year high for the FTSE 100 index, although it stumbled a bit towards the end of the week. I'm still trying to work out quite why the markets have been perky recently when there's so much gloom around about the "real economy".

It's not the first time that the Stock Exchange and the wider economy have moved in opposite directions, of course. They did much the same thing in the nuclear winter that was the British economy rate of growth you understand, in the long term the prospects for the UK should still be relatively benign, especially when we look over the channel at France and Germany. Isn't it funny how no one but no one is talking about Britain joining the euro any more?

Perhaps the most remarkable aspect of the stock market's bull run is how much merger and acquisition activity there has been. These are times when the benefits of holding shares in a nominee account at a broker can be felt most keenly, as they happily sort out the paperwork associated with such activity.

It makes it just a little easier to bear when, as I have written before, excellent stocks such as Manchester United or Belhaven, to name two disparate examples, find themselves being gobbled up by much bigger predators.

These were companies carefully chosen by your correspondent in the hope and expectation that they would be long-term success stories. Clearly cleverer, richer people than me agreed with that.

Not that I'm ungrateful for the premium that attaches itself to such take over targets, sometimes long before the corporate action actually happens.

So it continues to be with my holding in the telecoms company O2, the eternal takeover target, and to which I added another slug of shares last week.

Talk about O2 being bought by Royal KPN or Telefonica or someone else never seems to die away for long. Even as it posted increases of 1 or 2 per cent a day in its share prices I was readying myself to dive in and buy some more O2, buoyed by the knowledge that even at such record highs my past purchases, made at anything from 48p to 151p would keep my head above water.

The other great thing about O2 and the appreciable rise in its value since the great telecoms slump of a couple of years ago is the way that my accumulation of shares has offset the lacklustre showing of BT.

You see, O2 was spun out of BT in 2001 and the shares formed the foundation for my current, much bigger, holding.

Anyone who held on to or added to their O2 shares would have done quite well, with the shares up now 50 per cent on their notional price when O2 demerged. They way outperformed BT over the same time period.

If only Vodafone were showing anything like the strength of O2 or, indeed, the wider market, remarkable considering its size and the weighting it has in the FTSE 100 Index.

However, the shares just seem stuck at the 150p level.

It seems that no one wants to view Vodafone as a growth stock anymore or even as a proxy for general world economic growth (it is a global enterprise after all).

In fact, Vodafone doesn't even seem to command the dignity that a rather more old fashioned utility might enjoy. Yet there can be few better hedges against a global slowdown, and there are plenty of emerging markets where Vodafone might well find itself benefiting from the leap frog effect, as communities that never had much in the way of land line infrastructure just migrate straight on to mobile technology for their telecoms needs.

I hope, and expect, Vodafone will catch up with its peers. It certainly isn't about to be taken over.

s.o'grady@independent.co.uk

Independent Partners; Do you need financial advice on your investments, pension or insurance? Book a free consultation with an independent Financial Adviser at VouchedFor.co.uk

Finacial products from our partners
Property search
  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

ES Rentals

    iJobs Job Widget
    iJobs Money & Business

    SThree: Graduate Recruitment Resourcer

    £20000 - £22500 per annum + OTE £30K: SThree: SThree Group have been well esta...

    Ashdown Group: Treasury Assistant - Accounts Assistant - London, Old Street

    £24000 - £26000 per annum + benefits : Ashdown Group: A highly successful, glo...

    Ashdown Group: Business Analyst - Financial Services - City, London

    £50000 - £55000 per annum: Ashdown Group: Business Analyst - Financial Service...

    SThree: Trainee Recruitment Consultant

    £18000 - £23000 per annum + OTE £45K: SThree: At SThree, we like to be differe...

    Day In a Page

    Not even the 'putrid throat' could stop the Ross Poldark swoon-fest'

    Not even the 'putrid throat' could stop the Ross Poldark swoon-fest'

    How a costume drama became a Sunday night staple
    Miliband promises no stamp duty for first-time buyers as he pushes Tories on housing

    Miliband promises no stamp duty for first-time buyers

    Labour leader pushes Tories on housing
    Aviation history is littered with grand failures - from the the Bristol Brabazon to Concorde - but what went wrong with the SuperJumbo?

    Aviation history is littered with grand failures

    But what went wrong with the SuperJumbo?
    Fear of Putin, Islamists and immigration is giving rise to a new generation of Soviet-style 'iron curtains' right across Europe

    Fortress Europe?

    Fear of Putin, Islamists and immigration is giving rise to a new generation of 'iron curtains'
    Never mind what you're wearing, it's what you're reclining on

    Never mind what you're wearing

    It's what you're reclining on that matters
    General Election 2015: Chuka Umunna on the benefits of immigration, humility – and his leader Ed Miliband

    Chuka Umunna: A virus of racism runs through Ukip

    The shadow business secretary on the benefits of immigration, humility – and his leader Ed Miliband
    Yemen crisis: This exotic war will soon become Europe's problem

    Yemen's exotic war will soon affect Europe

    Terrorism and boatloads of desperate migrants will be the outcome of the Saudi air campaign, says Patrick Cockburn
    Marginal Streets project aims to document voters in the run-up to the General Election

    Marginal Streets project documents voters

    Independent photographers Joseph Fox and Orlando Gili are uploading two portraits of constituents to their website for each day of the campaign
    Game of Thrones: Visit the real-life kingdom of Westeros to see where violent history ends and telly tourism begins

    The real-life kingdom of Westeros

    Is there something a little uncomfortable about Game of Thrones shooting in Northern Ireland?
    How to survive a social-media mauling, by the tough women of Twitter

    How to survive a Twitter mauling

    Mary Beard, Caroline Criado-Perez, Louise Mensch, Bunny La Roche and Courtney Barrasford reveal how to trounce the trolls
    Gallipoli centenary: At dawn, the young remember the young who perished in one of the First World War's bloodiest battles

    At dawn, the young remember the young

    A century ago, soldiers of the Empire – many no more than boys – spilt on to Gallipoli’s beaches. On this 100th Anzac Day, there are personal, poetic tributes to their sacrifice
    Dissent is slowly building against the billions spent on presidential campaigns – even among politicians themselves

    Follow the money as never before

    Dissent is slowly building against the billions spent on presidential campaigns – even among politicians themselves, reports Rupert Cornwell
    Samuel West interview: The actor and director on austerity, unionisation, and not mentioning his famous parents

    Samuel West interview

    The actor and director on austerity, unionisation, and not mentioning his famous parents
    General Election 2015: Imagine if the leading political parties were fashion labels

    Imagine if the leading political parties were fashion labels

    Fashion editor, Alexander Fury, on what the leaders' appearances tell us about them
    Phumzile Mlambo-Ngcuka: Home can be the unsafest place for women

    Phumzile Mlambo-Ngcuka: Home can be the unsafest place for women

    The architect of the HeForShe movement and head of UN Women on the world's failure to combat domestic violence