Market Report: New management to raise hopes for Amvescap

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The Independent Online

It pointed out that a new senior management team is in place at the Anglo-American fund manager and there is already evidence of a reversal in the company's fortunes. UBS, which raised its recommendation to "buy" from "hold", said: "We have upgraded because we believe Amvescap has passed, or is close to passing, the turning point. There is a new senior management team, the investment performance is improving and the company is focused on boosting profitability."

The fund manager has a new chief executive and finance director. Both have arrived with high reputations - the CEO, Martin Flanagan, is from Franklin Resources, and Loren Starr, the CFO, from Janus. Mr Starr's old firm had been rumoured to be interested in bidding for Amvescap at the start of the week. According to that story, Janus itself is vulnerable to takeover and would like to bid for Amvescap as a way of defending itself.

AstraZeneca rose 35p to 2,610p despite news that Deutsche Bank had removed the drugs giant from its Pan-European Focus List, which consists of the broker's favourite stocks on the Continent. Dealers suggested that AZ was unaffected by Deutsche's move, thanks to vague rumours of a bid for the group. Should anyone want to buy AZ they will have to spend more than £50bn. Analysts argued that if there is a predator circling the AZ, it is most likely to be GlaxoSmithKline, 9p higher at 1,491p.

Meanwhile, Lehman Brothers warned that costs at Shire Pharmaceuticals are bound to rise significantly in 2006 and beyond and so downgraded the stock to "overweight" from "equal weight". But Shire advanced 3p to 703.5p.

Kingfisher gave up 3p to 216p as hopes of a bid for the DIY group from its US rival Home Depot waned. According to talk on Wall Street, Home Depot is eyeing an acquisition closer to home. It is said to be mulling a move for Hughes Supply, a Florida distributor of materials to the construction industry.

Legal & General rose 2p to 110.75p while Royal & SunAlliance added 2p to 105p after the Treasury backtracked on plans last month to introduce new legislation for life insurers. More than 56 million shares in Aegis changed hands and dealers said the bulk had been bought by Vincent Bolloré. At the last count, the French financier controlled 21.7 per cent of the media group. Despite this, Aegis dropped 2p to 120p.

Reports that a consortium led by the former Emap radio boss Tom Schoonmaker is stalking GCap Media pushed the stock 10p higher to 351p. According to the speculation, the consortium has the firepower to bid more than 400p a share for the radio group. But Bridgewell Securities was sceptical about the story. The broker said: "At 400p we believe that a bidder would be hard pushed to generate value without significantly changing the structure of the group."

Melrose Resources dropped 29.5p to 348p after a disappointing drilling update. The group said its latest Bulgarian exploration well on the Samotino-1 prospect was dry and would be abandoned. Melrose's drilling rig will now move to the Samotino-2 prospect in search of gas. Management estimates that this well has a 1 in 6 chance of success. A result is likely at the end of this month or the start of December.

JKX Oil & Gas, up 1.5p to 216.5p, saw Bruce Burrows, its finance director, sell 60,000 shares at 210.5p. London Clubs put on 5p to 140p after securing a licence from the City of Westminster to operate a casino, bar and restaurant in a site next to the Empire cinema in London's Leicester Square.

Charles Stanley ticked 5p higher to 284.25p after abandoning negotiations to buy its fellow stock broking firm Rowan Dartington. The two companies had been in talks for more than eight months.

Finally, Neteller dropped 30p to 708.5p on fears that Monday's third-quarter trading statement from the e-money operator could disappoint. Investors fear that Neteller might come out with a cautious update which, given the stock's strong performance over the past 12 months, would be taken badly by the City. There was also talk that a large chunk of founder shares will soon come on the market. A key lock-up for early stage shareholders of Neteller is due to expire within the next month, and many predict that these investors will rush to cash in their chips.

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