Market Report: Proteome set for lift-off as it receives US patent

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The Independent Online

One to watch out for on Monday is Proteome Sciences. The biotechnology group is set to go through the roof after it was granted a long-awaited US patent. The US Patent Office followed Europe yesterday and granted the AIM-listed group's patent for the detection of proteins in diseases.

Proteome said at its annual general meeting yesterdaythat a string of deals were dependent upon the clearance of its patent in the US. At the time it was unaware its application had been successful, but the news was live on the patent office's website yesterday afternoon. Market sources had got wind of the news and the stock closed up 8p at 62p.

Back on the top tier, the market was trying to digest Thursday's shock meltdown. There was some good news for a few of the blue chips that had taken a beating. The real estate investment trusts and housebuilders enjoyed a bounce but top of the pile was Northern Rock, more beleaguered than most of late, which was up 22.5p at 792p. The chairman also announced he had bought 2,500 shares.

One trader said: "A few of these guys have been hit hard as a result of being oversold from this sub-prime contagion. The market is looking at them again as they still represent good value." Barratt Developments was another beneficiary of the move, as was Persimmon, which finished the day up 21p at 1,099p.

After the deluge came chaos as the markets zig-zagged throughout the day. The FTSE 100 opened down after the panic selling had migrated to Asia. It then rallied, fell and rallied once more, only to close down 36 points at 6,215.2. Bid speculation on the market was flat and traders were predicting an end to the wealth of rumours that have swirled around the market this year. They blamed the lack of appetite in the credit market as deals including those with private equity bids for Alliance Boots and EMI looked especially rocky. State Street Global Markets said that while the gilt may be coming off the equity markets, "this is still a golden scenario compared with the horror show unfolding in the credit world with CDS indices gapping, LBO financing faltering and hedge funds imploding."

One battle being played out on the top tier is Resolution, which scooted up the leaderboard as its bid for Friends Provident came under fire. The stock rose 18p to 649.5p as investors showed their appreciation for Hugh Osmond and his launch of the so-called "battle of the zombies". Osmond's Pearl Assurance had built a 15.85 per cent stake in Resolution by the end of the day and is trying to derail the merger. The stock soared to second in the leaderboard on rumours he could bid for the whole group. Friends Provident dropped 1.5p to 180p.

The miners took the biggest hit of the day as investors locked in profits, with Anglo American falling the furthest, down 114p to 2,739p, with Antofagasta not far behind.

Emap bestrode the mid tier like a colossus, rising more than double anyone else in the FTSE 350. It was up on the back of a statement saying it was considering an asset sale or potential break-up of the group. It has called in its banking advisers Citi and Lazard to perform a review of the group's structure after an unsolicited approach. It added that it will also continue searching for a new chief executive. Another company holding bid talks did not fare so well. While FKI soothed the market's nerves, denying rumours that negotiations had ended and reversing a two-month-long decline, it fell a further 5.16 per cent to 101p. There was also speculation that Candover Investments faced stiff competition in its agreed €1.5bn bid for Stork.

United Business Media was up 1.5p to 758p after the market received its interim results well. It was buoyed by a strong performance from PR Newswire and growth in Asia.

On the growth market, biosciences group Abcam was among the top risers after announcing it was in preliminary talks with "a small number of potential offerors" over a takeover deal. The stock closed up 11.29 per cent at 345p.

Weak trading statements hit several AIM companies, with Robotic Technology Systems among the biggest fallers. It closed down 3p at 12.5p after admitting its first-half trading had been hit by a low order intake and an ongoing dispute with RTS Flexible Systems. Another group to suffer the reporting bug was Dowlis Corporate Solutions, after a disappointing trading update. While it expects first-half revenue to rise 13 per cent, it said it could miss targets for the full year.

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