Market Report: Commerzbank disposals hit IP2IPO shares

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The Independent Online

The presence of a distressed seller in the market took a heavy toll on IP2IPO. Shares in the intellectual property group finished 29.5p lower at 507.5p although brokers noted that chunky lines of stock had crossed the market at prices as low as 467p.

The seller is believed to have been Commerzbank. The German bank recently closed its proprietary trading desk, which focused on using the group's capital to make a profit from short-term bets on the stock market, and is now believed to be in the process of liquidating the desks remaining positions. However, market professionals expect IP2IPO's share price to rally once Commerzbank has disposed of its holding. At the last count, the bank's shareholding stood at 4 per cent.

Since the start of the month, shares in the intellectual property group have lost about 30 per cent of their value but are never the less well above the level at which they stood this time last year. Meanwhile, IP2IPO directors seem convinced that the group's future is rosy. In the last few weeks alone they spent £285,000 on stock at prices between 545p and 633p. Leading the way has been IP2IPO's chief executive, David Norwood, who accounted for the bulk of that total.

Commerzbank' is also known to have stakes in Regal Petroleum, up 7.5p to 91p, and Evolution Group, unchanged at 117.5p, as a legacy from its proprietary trading days.

Among blue chips, Old Mutual added 2p to 119p as investors were cheered by suggestions that Skandia, the Swedish insurer for which OM has tabled an offer, may be looking at ways to break itself up. Such a move would scupper the offer from the South African financial services giant. There was also talk that a counter offer could be on the way for OM. Williams de Broe believes that any deal that stops a tie-up between Skandia and OM is good news. It is convinced that the South African group's move will destroy value for its shareholders.

Hays fell 1.75p to 124.5p on the back of a downgrade from UBS. The Swiss broker cut its rating to "neutral" from "buy" and warned that the recruitment specialist is very exposed to the slowdown in the UK economy. On a purely valuation basis, UBS pointed out that Hays is now the most expensive major staffing group in the Europe.

Xstrata lost 18p to 958p as a number of analysts poured cold water on rumours of a bid for the mining group from its rival Rio Tinto, off 27p to 1,605p. Among them was John Meyer, at Numis Securities. He argued that a tie-up would represent a significant turnaround in Rio's corporate strategy. Mr Meyer also believes that Rio is unlikely to be keen on taking on Xstrata's ferro-alloy business in South Africa nor its zinc assets.

The wider FTSE 100 fell 11 points to 4,971 after a weak start to trading on Wall Street where both the Dow Jones Industrial Average and tech-laden Nasdaq Composite lost ground.

Lower down the pecking order, Pursuit Dynamics added 11.5p to 203.5p on rumours that the company is close to unveiling a major deal for its revolutionary technology. Earlier this week, Pursuit announced that it had licensed a PDX-47 unit to Green King for installation at its Bury St Edmunds brewery. Investec Securities believes orders for the group's technology are about to snow ball and hints that another UK brewing company is at present testing out Pursuit's PDX-47 product.

Vislink firmed 1.5p to 28.5p thanks to a bullish trading statement from the broadcast equipment specialist. Computer Software added 1.5p to 55p after the group promised investors that by the end of 2005 it will have more than doubled its earnings and revenues. Mano River Resources ticked 0.5p better to 9.75p after boasting of a diamond discovery at its prospect in western Liberia.

API was unchanged at 141p despite whispers that another offer could soon be on the way for the packing specialist. Last month, takeover talks with Illinois Tool collapsed causing API shares to plunge. Nevertheless, Steel Partners, the US hedge fund which is thought to have originally put the company into play, retains its 29.9 per cent shareholding. It is said to be keen on finding an exit for its investment and is rumoured to be on the way to negotiating a fresh bid for the company.

Finally, ToLuna made its debut on AIM. The group, which provides technology to market research professionals, raised £5m at 70p and saw its stock close at 73p. ToLuna was established in May 2000 with £2m of funding from Eurovestech, the AIM listed venture capital company run by former Schroders analyst Richard Bernstein. The fresh cashed raised by ToLuna will be used to finance the company's ongoing growth.

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