Market Report: Broker ICAP buoyed by volatile global markets

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Investors are looking for a chart breakout by ICAP, the inter-dealer broker, where business is reported to be booming in the last couple of weeks due to volatile global markets.

Technical investors are looking for a close above 486p to break out of the 50-day moving average and bulls expect the stock to test recent highs regardless of whether there is a general market rebound or not. One trader said investors have been slow to understand the company, which gives banks and larger trading houses anonymity by matching bargains, and that the recent sell-off should have been excellent for business. Brokers Fox-Pitt Kelton and Dresdner Kleinwort were pushing the stock on Monday, and Citigroup's $10.8bn (£5.6bn) bid for the Japanese broker Nikko Cordial also has positive implications for ICAP's valuation. The shares rallied 2.75p to 480p.

Merrill Lynch believes the recent falls have created a good buying opportunity in the water stocks. The broker reiterated its "buy" advice on Kelda and Severn Trent, telling clients that both stocks are now more attractive to prospective leveraged buyouts than they were last autumn, when bid talk first surfaced. Severn Trent closed 25p firmer at 1,400p, while Kelda added 21p to 903p.

Real estate assets were in focus after JP Morgan became the latest broker to highlight recent falls as a buying opportunity. The broker told clients that "value is returning to the sector" and that British Land, up 48p to 1,518p, Liberty, 25p better at 1,225p, and Land Securities, 56p firmer at 2,067p look cheap. But it also believes that share prices have not fallen enough to advise buying "aggressively" into the sector.

London shares closed better despite a sluggish start to trade in New York. A raft of blue chips went ex-dividend, knocking around 33 points off the index, but bargain hunters pushed the FTSE 100 up 18 points by the close at 6,156.5.

Cairn Energy missed the cut and will be relegated from the FTSE 100, to be replaced by Daily Mail & General Trust. The weaker oil price and delays over an Indian pipeline project have hit sentiment at Cairn, and although the shares climbed 23p to 1,599p yesterday, it will have to spend some time in the mid-caps. Daily Mail climbed 18.5p to 813p and has added more than 45 per cent in the past six months.

Mid-cap traders are expecting a strong set of numbers from the emergency power supplier Aggreko today. The company is expected to report a 46 per cent jump in full-year profits to £82m, but there are plenty of investors who believe that those numbers will be beaten. The shares traded 17.75p better in early deals yesterday, within touching distance of a new all-time high, before a mild bout of afternoon profit-taking saw them close at 451.25p, 10p better.

Goldman Sachs upgraded United Business Media after a strong set of results last week. The influential US investment bank put the company on its "conviction buy" list and increased its price target from 676p to 851p, helping the shares to close 32.5p better at 781.5p.

Rumours of a 220p-per-share bid for Debenhams did the rounds again. The stock has been in focus for the last three weeks since the talk first surfaced but not all traders are convinced that a deal is imminent. One trader said: "The private equity consortium that previously owned Debenhams had a tough job selling the debt and the stock has hardly been a star since it came back to the market. There are much better options out there." Even so, the shares rallied 8.5p to 182.5p.

On AIM, Indago Petroleum pleased investors by announcing it is in negotiations to sell a "material" slice of its assets for more than yesterday's opening market capitalisation. The word is that the assets will sell for 70p per share, with the remainder of the company to go on the block at a later date. The shares surged 14.25p to 60.75p.

Investors rallied around the property group Rok after the shares fell more than 14 per cent in the last week despite reporting a bullish set of numbers two days ago. Traders said a bout of profit-taking was probably due but that it coincided with a much wider market sell-off. The stock closed 99p better at 985p, writing off most of the recent falls.

Finally, an upbeat set of seismic testing results from the exploration and infrastructure group Baltic Oil Terminals sent it 12p firmer to 200p. But, if house broker Arden Partners is to be believed, there could be plenty of upside still left in the shares. Arden reiterated its "buy" stance on the stock with a very bullish 373p price target.

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