Market Report: Brokers sing praises of soaraway Man Group

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The Independent Online

Traders can't seem to get enough of Man Group, the world's largest quoted hedge fund manager. Its share price has more than doubled in the past 12 months as equity markets continue to perform strongly and its own funds continue to attract new investors.

Until a month ago, the company was hoping that its latest retail hedge fund offering was going to raise $1bn (£570m), but the final closure has brought $2.3bn of new funds in, making it the largest-ever private client hedge fund launch. Analysts were quick to sing the praises of Man. Numis Securities and Credit Suisse issued bullish notes on the stock, with the Swiss broker reiterating its "outperform" stance on the shares with a price target of 2,670p.

Some traders feel the company could attract bidders, given the recent sector consolidation in the US and Man's strong position in hedge funds and commodities trading. One said: "This launch shows that Man's strength is global, and it is without doubt the best quoted fund management group in the London markets. I see no reason why any major investment bank or fund management group would not want Man as part of its operations, even if it would not come cheap. This is a much better business than Mercury Asset Management was."

Man Group shares were in demand all day as 4 million shares changed hands, sending the stock up 105p to 2,557p, an all-time high.

The online poker stock PartyGaming was well bid in the run-up to results due on Tuesday. Consensus analyst forecasts are looking for a 45 per cent increase in revenues, up to $322.6m, on the same period last year. Traders seem to have forgotten about the possibility of US litigation, for the moment at least, with strong demand sending its shares 6.75p better yesterday at 151.75p, the best performer in the FTSE 100. Its rival 888 Holdings was unable to take advantage of the demand for PartyGaming, closing unchanged 235p.

The London markets enjoyed a strong end to the shortened week's trading, with strength in property, banks and pharmaceuticals offsetting weakness in oils and mining. The FTSE 100 index of leading shares closed the session 28.6 higher at 6029.4.

The pubs landlord Mitchells & Butlers has given its suitor Robert Tchenguiz notice that it will consider only a formal written offer, but traders remain confident the 550p-a-share informal offer made yesterday afternoon will tempt most shareholders to accept. Its shares rallied 34p to 497.5p, having been bid as high as 501.25p.

Northern Foods continued to slide, falling another 1.25p to 92.5p. Not a single analyst covering the stock is prepared to recommend a "buy" rating, and rumours in the market are rife that another profits warning and a cut in the dividend are around the corner.

CSR, the volatile Bluetooth microchip developer, was among the leading gainers in the FTSE 250 as the investment bank UBS upped its forecasts for the company and increased its target price to 1,450p, noting that most of the risks in the stock are on the upside. CSR gained 65p to 1,265p on the back of the note. The rival microchip stock ARM Holdings, once the darling of the sector and now playing second fiddle to CSR, is due to report first-quarter numbers next week but attracted few buyers, closing 2p higher at 133.25p.

Among small caps, the broker and corporate finance boutique Daniel Stewart is rumoured to be trading ahead of any market expectations on the back of a strong initial public offering market and good deal flow. Its shares edged 1.25p better at 27.5p.

Anyone lucky enough to have got hold of a handful of shares in China Real Estate Opportunities will be sitting pretty, as the stock has risen an astonishing 920 per cent in the four months since coming to the market in December. The company is yet to confirm a property deal, but with its stock so tightly held only a handful of buy orders are needed to send its shares higher.

More than 76,000 shares changed hands yesterday, about 15 per cent of the free float, sending the stock 525p better by mid-afternoon as market makers scrambled to send the stock up to tempt a few sellers. Its shares closed off the highs, but still added 400p to 1,325p.

Mission Marketing enjoyed a strong first day's trading having been placed with institutional investors at 120p by the broker Seymour Pierce. The company wasted no time making its first acquisition as a public company, announcing the purchase of Bray Leino, a marketing communications agency, for an initial consideration of £24.5m. Its stock closed at 125.5p, a 4.6 per cent premium.

Finally, encouraging drilling results from its Californian operations gave an Easter boost to Empyrean Energy. Its stock closed 21p better at 126.5p, a 19.9 per cent improvement.

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