Market Report: Standard Chartered hits new high on US bid talk

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The Independent Online

"We would not discount this speculation entirely." So said Cazenove, the blue-blooded broker, of rumours that Standard Chartered, the Asia-focused bank which it advises, is to be the target of a bidding war among US financial institutions. Traders, who always pay close attention to what a house broker says about its clients, decided not to discount the speculation and chased Standard Chartered shares up 76p to a record high of 1,401p.

Cazenove said several could justify paying close to £23bn, or 1,720p per share.

Gossips in Hong Kong came up with a list of potential suitors said to be examining a bid. The list includes Citigroup, Wachovia, Wells Fargo and Bank of America. Oh, and also JP Morgan Chase, which has a joint venture with Cazenove in the UK.

"We would be surprised if several of the large US banks did not monitor Standard Chartered fairly constantly," Cazenove's note to clients continued. "Barriers to entry in many Asian markets mean that Standard Chartered would enable many US banks to acquire a presence which would otherwise not be feasible to achieve within a reasonable timeframe."

Of course, there are "Chinese walls" inside investment houses such as Cazenove that separate the analysts who write research from the corporate advisers who might know about any informal chats Standard Chartered has had with US suitors. However, analysts always choose their words very carefully when writing about stocks with which their employer has a business relationship. One over-excited trader went as far as describing Cazenove's note as "a giant neon 'For Sale' sign outside Standard Chartered's head office".

The bank itself said it had no need to merge, had a strong track record in emerging markets and was looking forward to a prosperous, independent future. Enthusiasts took that to mean it will force an acquirer to pay top dollar.

Trading in Standard Chartered shares was twice as active as usual, on a day when, with Wall Street closed for Martin Luther King Day, trading across the UK market was well down on usual levels. Domestic optimism kept the FTSE 100 drifting upwards, closing at at a new 55-month high of 5,740.2, 29.2 points to the good.

Anecdotal evidence from the online poker industry is that all the major sites have been busy during these long winter nights, and that the next round of trading updates will be positive. PartyGaming, the biggest of the lot, saw its shares jump more than 6 per cent, by 8.75p to 149.25p. And Sportingbet shares clicked over the 400p mark for the first time, closing up 9p at 408p.

The threat of fresh industrial action by construction workers at Heathrow's Terminal 5 sent shares in the airport operator BAA down 5.5p to 639p. There are concerns that, if the second four-day stoppage goes ahead, the company may not be able to repeat its boast that the project is running on time and on budget.

The bull run in commodities prices continued apace, with copper, oil, platinum and gold among the notable risers. That meant that investors in the specialist copper miners had tapped a rich seam. Antofagasta was up 20p to 1,864p and Kazakhmys rose 11.5p to 804p. The mighty BP gushed 11.5p to 666p, with Royal Dutch Shell not far behind with a 23p gain to 1,952p. Aquarius Platinum hit a record 526.5p, up 41.25p. And Uruguay Mineral Exploration, a little gold producer, was up 19p to 265.5p when its chairman told investors in Canada the surge in the gold price meant it could bring forward the payment of its maiden dividend.

Brokers have been able to drum up buying interest in a string of smaller companies after organising management presentations in the City. The sight of a suited Bob Geldof promoting Ten Alps, the television company he founded, inspired a 1p rise in the shares, to 52.5p. The rest of the management will continue the City roadshow this week as Collins Stewart, the broker, attempts to find a home for a big slug of shares from one wealthy investor who wants out.

Carter & Carter, a mechanics' training company, surged 35.75p to 497p after a well-received presentation at the offices of Teather & Greenwood last week. Attendees said another star had been Felix, a quiz machines developer, whose shares were up 3.75p to 43.5p yesterday.

And there are high hopes for an imminent investor day on the experimental fuel-cell sector at Insinger de Beaufort. ITM Power, down 0.75p to 214.25p yesterday, is among the companies presenting. Meanwhile, Acta, an Italian company, continues to generate interest in its work developing fuel cells that do not require the use of expensive platinum. Its shares were up 10.5p to a record 133p.

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