Market Report: BSkyB climbs on eve of broadband offering

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The Independent Online

The market will be focused on BSkyB this morning, after strong support yesterday before today's announcement on the group's entry into the home broadband market.

BSkyB is expected initially to limit free home broadband access to its existing 8 million subscribers, although its entrance into the market will increase the pressure on Carphone Warehouse, whose first-mover advantage seems to have been quickly forgotten by the market.

Analysts expect BSkyB to generate strong growth as customers bundle television, telephone and broadband access. BSkyB is already dominant in the television market, and many traders expect it to dominate free broadband as well. The group is unlikely to give firm indications as to how much it intends to invest in broadband and today's details are unlikely to include any definite numbers. BSkyB rose 8p to 541p, while Carphone Warehouse continued its recent poor form, falling 7p to 275.5p.

The retailer and consumer credit rating group GUS was again in focus as talk surfaced that the private-equity giants The Blackstone Group and Kohlberg Kravis Roberts are preparing a bid for Argos and Experian, leaving GUS shareholders with cash and Homebase, the home improvement chain. Against a weaker overall market, GUS shares were 18p better at 982p, having traded as high as 987p earlier. Traders speculated that a hostile bid for the two major parts of the group could value the shares at up to 1,200p.

Once again concerns over the oil price sent London shares lower as the per-barrel price ticked above $78, although the FTSE 100 closed off the lows, down 6.6 points at 5,701.0, having been 53 points lower earlier. Even oil stocks failed to benefit, with BP 9.5p worse at 633.5p and Cairn Energy down 14p at 2,081p.

The private-equity investor 3i was the worst performer in the FTSE 100 on a technical move, falling 153.5p to 863p after the shares were consolidated following a £700m return of capital to shareholders.

Yesterday morning's bombshell news that the chief executive of the AIM-listed BetonSports had been arrested on unspecified charges in the US sent investors running for cover from the online gambling sector. BetonSports closed 24.5p worse at 122.5p, while rival SportingBet was 42.25p weaker at 282p.

Some traders said the arrest could have been a political move but others pointed to the colourful past of some senior staff at Beton and said that it could have nothing to do with legal threats across the industry.

Least affected were the old hands in the gambling industry - William Hill and Ladbrokes, 1.5p worse at 589p and a penny weaker at 379.5p respectively. The online gambling giant PartyGaming closed 6p worse at 103p, while 888 Holdings shed 7p to 193p.

John Maltby, the chief executive of sub-prime lender Kensington Group, took advantage of last week's dreadful trading on growing arrears and bad debts to pick up more stock. He bought another 50,000 shares at 782p on Friday, taking his total stake to 280,083 shares as the stock rebounded 31p to 846p in early deals before profit-taking saw it close 3p firmer at 818p.

CRC Group, the technology repair services group, was out of favour with investors fearing no news is bad news. The company confirmed on 30 June that it was in talks that may lead to an offer, but since then the markets have weakened and some investors fear talks may have stalled and trading worsened. The shares dropped 5.5p to close at 29p.

The alternative energy group and turbine manufacturer Clipper Windpower continued to attract buyers after Friday's big announcement about a tie-up with BP that could be worth £4bn to the group. The integrated oil giant acquired a five-year option to buy 10 per cent of Clipper at 377p per share - a deal that already looks like a winner as Clipper powered 64p better to close at 426.5p.

After the shares hit an all-time low of 56p last week, several market observers said the falls in Monstermob'sshare price were overdone and the stock could easily rally to more than 100p. Those predictions are beginning to look on the money, as the shares closed 3.75p better at 73.25p.

Cleardebt Group, one of a growing number of companies that administers individual voluntary arrangements, reported 86 per cent quarter-on-quarter growth, along with a very bullish trading statement. The shares closed 1.88p better at 4p, an 88.7 per cent rise.

Finally, Faroe Petroleum was out of favour as market makers tried to place a line of stock, thought to be 400,000 shares, on behalf of two institutional shareholders. The word is that demand is not good, and the shares fell 4p to close at 115p.