Market Report: Roller-coaster ride rattles traders in iSoft

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The Independent Online

Shareholders of iSoft, the healthcare software group, are used to a rocky ride, but nothing will have prepared them for yesterday's trade. The first rumour sweeping the market was that the company was about to announce it will need to raise new capital, followed by a story that the chief executive, Tim Whitson, is poised to step down.

Both rumours were emphatically denied by the company, but its shares tumbled, at one point dropping 69p to trade at 78p, an all-time low. However, anyone flushed out at the lower levels will be kicking themselves, as the company responded by reiterating its guidance for the year given in its trading statement released on 30 January. ISoft stock recovered most of its losses to close at 130.75p, a fall of 16.25p.

In the large caps, Barclays saw heavy volume as more than 120 million shares changed hands, pushing the price 8p higher to 686p. Yet again takeover rumours were doing the rounds late in the session, with, inevitably, Citigroup being talked of as the favourite to bid.

One trader said: "If Citigroup could get its hands on the investment banking and fund management arms of Barclays it would be delighted. The trouble is the retail banking division, which probably doesn't interest Citi, and selling that off as a stand-alone business could be difficult. Still, I would not be surprised to see an offer pitched at about 850p, which would still leave plenty of upside for a buyer."

The insurance giant Prudential was back in focus as it launched its first Chinese product, and traders talked of a possible offer for the group from its French rival AXA. Pru is considered to be vulnerable after its short-lived takeover talks with its UK rival Aviva collapsed after only five days. One trader said: "If another bid comes in it is not likely to be on a very friendly basis, given what happened with Aviva, who will be watching this story develop as it could still re-enter the fray as a white knight." Prudential was 26p firmer at 677.5p, while Aviva was a penny weaker at 817p.

Despite a busy trading day the market was unable to find any real direction, and the FTSE 100 closed 1.6 points better at 6045.7.

A few brave punters have taken out short positions on the copper miner Kazakhmys on the back of a stellar run since results on 30 March, in the hope that its stock will succumb to profit-taking. The miner's stock has risen 33 per cent since the results, and continued to attract buyers during yesterday's session, closing 38p better at 1,269p.

Alliance & Leicester continued to slide as hopes of a bid faded. Losing a 34.7p dividend yesterday started the decline, and sellers continued to bail out, sending shares in the mortgage bank 34p lower to 1,161p.

Results from Pinewood Shepperton last week continued to attract buyers, with some traders saying the property portfolio is worth double the current share price on its own. With plans to develop the site in west London, its stock has performed well recently, adding more than 20 per cent since the start of the year. Last night its shares firmed another 2p to 232p.

Few stocks in the oil and gas sectors are a better proxy for the wholesale market than Venture Production, which as a pure production play has tracked the oil price all the way up. Its shares hit an all-time high yesterday, 26.5p better at 701p, as the price of oil broke through $70 a barrel. The company's assets are about 60 per cent gas so has been a major beneficiary of the strong wholesale gas price.

ARM Holdings, once the darling of the dot.com boom, was attracting speculative buyers yesterday well ahead of first-quarter figures due on 19 April. Amazingly, despite having been in the doldrums since the tech market turned, the company has a market capitalisation of almost £2bn. ARM's rival CSR has replaced it as the chip stock to follow among technology investors, but sector watchers were busy picking up ARM, with the whisper being that its numbers will be better than expected. ARM firmed 3.5p to close at 138.25p, while CSR was 13p better at 1,260p.

Among the small caps Monterrico Metals was well bid, 31p better at 269p, after a long period of underperformance. Some traders believe that on current copper prices Monterrico's reserves at the Rio Blanco project could have a value of $45bn (£26bn). The broker Numis published a bullish note yesterday, with a target price of 785p on the stock, noting that the Polish miner KGHM is keen to buy up South American assets.

Traders will be on the lookout for IXEurope as it comes to AIM today. The data centre operator is expected to have a market capitalisation of £38m after raising £10m through an institutional placing by Investec. The issue was comfortably oversubscribed and the shares should enjoy a strong start from the placing price of 22p a share.

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