Market Report: C&W buoyed by executive share-buying spree

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The Independent Online

With Cable & Wireless shares almost doubling in price in the past 12 months, opinion is divided among analysts about the merits of buying the stock. But as far as management is concerned, there is clearly still time to back the truck up.

While presenting full-year results last week, senior management assured the market that it is not seeking a bid and that it will not demerge its non-UK operations until the struggling UK unit is back in profitability. However, executive chairman Richard Lapthorne, finance director Tony Rice and Europe, Asia and US chief executive John Pluthero all topped up their holdings yesterday, buying 700,000 shares between them at 190p per share, worth a total of £1.3m. Meanwhile, Deutsche Bank upped its target for C&W shares to 210p and reiterated its "buy" stance as the stock added 1.6p to close at 192.6p.

Dutch broker ABN Amro reviewed the mining sector and cut its rating on a handful of stocks including Anglo American and Vedanta Resources from "buy" to "hold", citing a slowdown in stockpiling in the metal industry and the possibility of a quiet summer for metal stocks. Even so, ABN still increased its price targets for both stocks. Anglo closed 2p better at 2,942p and Vedanta shed 21p to 1,469p.

Profit-takers took some recent gains off the table at ITV after a strong run on speculation that BSkyB will sell its 17.4 per cent stake in its rival to RTL. Sellers sent the shares 1.1p lower to 118p despite Goldman Sachs reiterating its "conviction buy" recommendation and 140p price target. Meanwhile, a very bullish note from Swiss broker UBS on BSkyB, with a price target of 900p, sent shares in the satellite broadcaster 20.5p firmer to 660.5p.

London shares were in positive territory all session, with the FTSE 100 ending 36 higher at 6,606.5. Traders were buoyed by an 11.4 per cent jump in the dividend at Vodafone, 8.3p better at 159.7p. Vodafone's good news offset weakness in Royal Bank of Scotland, down 5p at 637.5p, as it revealed a higher than anticipated cash element in its €71bn formal offer for ABN Amro, and more selling at GlaxoSmithKline on Avandia concerns. The pharmaceuticals giant lost another 28p to 1,306p.

Cairn Energy came in for a bout of profit-taking after a week of bid rumours, even though most traders have dismissed any chance of a firm offer for the company. The shares slid 46p to close at 1,790p, in line with a slightly weaker oil price. Traders also cashed in on last week's strong run in Premier Oil, another mid-cap oil stock perennially linked with bid talk, as it shed 19p at 1,134p.

Top pick in the mid caps was the industrial controls and engineering group Invensys, as brokers upgraded their recommendations on the stock after last week's surprisingly strong results. Long-term sellers Goldman Sachs upped their recommendation to "hold", as did HSBC, while Citigroup retained its "neutral" stance but increased its target price to 370p. The shares climbed another 22.25p to 393p.

The rot continues at the department store Debenhams as privately owned rival John Lewis continues to trounce the high street competition, with the shares another 3.5p worse at 134p, a fresh low. Debenhams listed at just under 200p in May last year after a period in the hands of a private equity consortium, but investors have been far from satisfied and April's profit warning is still encouraging sellers.

In the small caps, Oilexco surged 37p to a new high of 533p on an encouraging drilling report from its operations in the North Sea. The company told investors that it has made a substantial discovery at its Huntingdon prospect that could yield up to 80 million barrels. Brokers Merrill Lynch and Tristone Capital recently reiterated their "buy" advice with targets of 600p and 610p respectively.

LitComp, a supplier of financial and legal insurance products and litigation services, pleased investors with a bullish pre-close, full-year trading update. The shares moved up to AIM from Plus Markets in March 2006, only to promptly tank and lost half of their value by last September. The company expects to report full-year pre-tax profits of £800,000, up from a loss of £342,000 last year. The shares jumped 18p to 67.5p, the top performer in the smaller companies.

Investors are expecting a strong set of interim numbers from corporate healthcare insurance broker Jelf, due this morning. The shares, which have been on a stellar run since coming to the market in November 2005, rallied another 12p to a new all-time high of 272p.