Market Report: British Land aiming to build on Deutsche note

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It has been a good August for the property sector, and the broker Deutsche Bank reckons there is more upside left for British Land, the UK's second largest landlord. The German investment bank raised its price target for the shares from 1,315p to 1,570p.

Deutsche Bank is not alone in being bullish on the property sector. Some traders are saying that 10 per cent upside on top of these forecasts, easily achievable in the current London market, could see the shares get to as high as 1,750p once the company converts to Real Estate Investment Trust status.

In a note to clients, Deutsche analyst John Perry said: "British Land has in recent years been able to transform itself from an asset accumulator to an asset manager. Plus, it has expanded its development pipeline to over 2.3 million sq ft, much of which is located in the rapidly improving London City office market." British Land improved 16p to 1,368p on the back of the note. Of its rivals Liberty International added 14p to 1,129p and Hammerson rallied 4p to 1,288p.

Fresh bid speculation at GCap Media offset a bearish note on the media sector from the same broker, while Emap and Trinity Mirror both ended the session in positive territory despite Deutsche Bank cutting earnings forecasts. The bank believes the UK advertising market is set to worsen and that any recovery is likely to be slow and protracted, and sees further downside risk to 2007 estimates. Trinity Mirror added 4p to close at 469p, while Emap firmed 3p to 712p. Bid speculation has been rife at GCap for a while, and a late surge of buyers saw the shares close 8.5 per cent better at 208.25p.

Takeover chatter has done the rounds several times in the past six months at Corus Group, up 12.5p to 407.25p. Traders said that Severstal, the Russian steel group, is running the rule over Corus and could be planning a bid valuing the group at up to £4.4bn, approximately 475p per Corus share. But the rumours have been wrong before and one trader said: "This is definitely a story for a quiet August day. There is no more credibility to this story now than there was three months ago."

In another quiet session for the blue-chip index, the FTSE 100 closed 3.8 better at 5,900.4.

Punters are still betting that the materials and aviation group BBA will dispose of its materials division Fiberweb before a demerger penned in for the final quarter of the year. Disposal talks ended in late April but a flurry of buyers has put sale chat back in the market. The shares were among the best performers in the FTSE 250, climbing 11.5p to close at 275.25p.

Victoria Oil & Gas found some support after a rumour that the company is looking to invest in more projects in Kazakhstan. Recent disappointing drilling results have forced the price down from a high of 266p in February to open at 80p yesterday. But some investors expressed doubts about new ventures, pointing out that existing projects need to be resolved before the company embarks on more land acquisitions. The shares closed 8.75p better at 88.75p.

It looks like a formal offer for Monstermob, the mobile telephone service provider, is just around the corner after the stock surged 20p to 86p. It confirmed last week that it is in talks that may lead to an offer, and it is thought a 90p-per-share bid could come in the next few days.

Care UK, the healthcare group, closed 20p better at 479.5p on reports that a consortium including the group has won the North East Diagnostics contract, which should be worth £5m per year in revenue for the company. But talk that the company has also been awarded a similar contract in Manchester is not correct, as the company is bidding for that contract alone and has not yet been confirmed as a preferred bidder. Traders are expecting a formal announcement from the group in the next few days.

An institutional investor took out a line of 7 million shares in Plectrum Petroleum at 14p, clearing a stock overhang and sending the shares half a penny better to 14.5p by the close. The word in the market is that there is more good news coming from the company, which also confirmed it has been awarded new exploration permits in Australia.

Finally, Green Dragon Gas became the latest and largest Chinese company to list on London's secondary market. The group raised $25m through a placing at $5.56, giving it a market capitalisation of $525m. By the close the stock had reached $6.24, giving investors a 12.2 per cent premium.

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