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.


Independent Partners; request a free guide on NISAs from Hargreaves Lansdown

Arts and Entertainment
Alfred Molina, left, and John Lithgow in a scene from 'Love Is Strange'
A model of a Neanderthal man on display at the National Museum of Prehistory in Dordogne, France
Dawkins: 'There’s a very interesting reason why a prince could not turn into a frog – it's statistically too improbable'
newsThat's Richard Dawkins on babies with Down Syndrome
Malky Mackay salutes the Cardiff fans after the 3-1 defeat at Liverpool on Sunday
footballFormer Cardiff boss accused of sending homophobic, racist and messages
Arts and Entertainment
Martin Amis: Taken to task over rash decisions and ill-judged statements
booksThe Zone of Interest just doesn't work, says James Runcie
Life and Style
life – it's not, says Rachel McKinnon
Arts and Entertainment
Eye of the beholder? 'Concrete lasagne' Preston bus station
architectureWhich monstrosities should be nominated for the Dead Prize?
Finacial products from our partners
Property search
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

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

ES Rentals

    iJobs Job Widget
    iJobs Money & Business

    Corporate Tax Solicitor

    Highly Competitive Salary: Austen Lloyd: CITY - HIGHEST QUALITY INTERNATIONAL ...

    Relationship Manager

    £500 - £600 per day: Orgtel: Relationship Manager, London, Banking, Accountant...

    Trainee Recruitment Consultant

    £20000 - £25000 per annum + OTE £40,000: SThree: SThree Group have been well e...

    Test Lead (C#, Java, HTML, SQL) Kingston Finance

    £40000 - £55000 per annum: Harrington Starr: A Global Financial Service Organi...

    Day In a Page

    Middle East crisis: We know all too much about the cruelty of Isis – but all too little about who they are

    We know all too much about the cruelty of Isis – but all too little about who they are

    Now Obama has seen the next US reporter to be threatened with beheading, will he blink, asks Robert Fisk
    Neanderthals lived alongside humans for centuries, latest study shows

    Final resting place of our Neanderthal neighbours revealed

    Bones dated to 40,000 years ago show species may have died out in Belgium species co-existed
    Scottish independence: The new Scots who hold fate of the UK in their hands

    The new Scots who hold fate of the UK in their hands

    Scotland’s immigrants are as passionate about the future of their adopted nation as anyone else
    Britain's ugliest buildings: Which monstrosities should be nominated for the Dead Prize?

    Blight club: Britain's ugliest buildings

    Following the architect Cameron Sinclair's introduction of the Dead Prize, an award for ugly buildings, John Rentoul reflects on some of the biggest blots on the UK landscape
    eBay's enduring appeal: Online auction site is still the UK's most popular e-commerce retailer

    eBay's enduring appeal

    The online auction site is still the UK's most popular e-commerce site
    Culture Minister Ed Vaizey: ‘lack of ethnic minority and black faces on TV is weird’

    'Lack of ethnic minority and black faces on TV is weird'

    Culture Minister Ed Vaizey calls for immediate action to address the problem
    Artist Olafur Eliasson's latest large-scale works are inspired by the paintings of JMW Turner

    Magic circles: Artist Olafur Eliasson

    Eliasson's works will go alongside a new exhibition of JMW Turner at Tate Britain. He tells Jay Merrick why the paintings of his hero are ripe for reinvention
    Josephine Dickinson: 'A cochlear implant helped me to discover a new world of sound'

    Josephine Dickinson: 'How I discovered a new world of sound'

    After going deaf as a child, musician and poet Josephine Dickinson made do with a hearing aid for five decades. Then she had a cochlear implant - and everything changed
    Greggs Google fail: Was the bakery's response to its logo mishap a stroke of marketing genius?

    Greggs gives lesson in crisis management

    After a mishap with their logo, high street staple Greggs went viral this week. But, as Simon Usborne discovers, their social media response was anything but half baked
    Matthew McConaughey has been singing the praises of bumbags (shame he doesn't know how to wear one)

    Matthew McConaughey sings the praises of bumbags

    Shame he doesn't know how to wear one. Harriet Walker explains the dos and don'ts of fanny packs
    7 best quadcopters and drones

    Flying fun: 7 best quadcopters and drones

    From state of the art devices with stabilised cameras to mini gadgets that can soar around the home, we take some flying objects for a spin
    Joey Barton: ‘I’ve been guilty of getting a bit irate’

    Joey Barton: ‘I’ve been guilty of getting a bit irate’

    The midfielder returned to the Premier League after two years last weekend. The controversial character had much to discuss after his first game back
    Andy Murray: I quit while I’m ahead too often

    Andy Murray: I quit while I’m ahead too often

    British No 1 knows his consistency as well as his fitness needs working on as he prepares for the US Open after a ‘very, very up and down’ year
    Ferguson: In the heartlands of America, a descent into madness

    A descent into madness in America's heartlands

    David Usborne arrived in Ferguson, Missouri to be greeted by a scene more redolent of Gaza and Afghanistan
    BBC’s filming of raid at Sir Cliff’s home ‘may be result of corruption’

    BBC faces corruption allegation over its Sir Cliff police raid coverage

    Reporter’s relationship with police under scrutiny as DG is summoned by MPs to explain extensive live broadcast of swoop on singer’s home