On the takeover front, traders talked of Barclays, HSBC and Citigroup as all likely to be interested in acquiring the emerging country focused bank. Certainly that is where most major banks make investments these days. In the last week alone Barclays has been reported as mulling a move into India while UBS took a stake in Bank of China.
But analysts also pointed out that Standard Chartered generates nearly a third of its profits in Hong Kong, where the local economy is performing very well. Economic growth in the former British colony is running at its fastest rate since 2000, unemployment is falling fast and consumer spending is once again expanding. In the meantime, mortgage lending is growing while retail banking arrears are firmly in decline. All this is great news for Standard Chartered.
The wider FTSE 100 index rose to a new four-year high of 5,494, up 47 points on the day. The blue chip index was once again driven higher by strong gains across the mining sector. Antofagasta gained 50p to 1,580p, Rio Tinto added 82p to 2,346p, Anglo American jumped 62p to 1,704p and Xstrata added 57p to 1,490p.
O2 firmed 1.5p to 157p on the back of an ultra-bullish investment note from Deutsche Bank. The German broker set a 200p price target on the mobile phone group in the wake of Monday's upbeat news from the company. Deutsche said: "O2's trading statement (at the start of the week) again highlighted the ability of the firm to operationally outperform its peers despite some quite torrid market conditions."
Going forward, the German broker suggested that a takeover of O2 is very likely. "We believe it is only a question of time before the compelling industrial logic causes someone, most probably Deutsche Telekom, to take a sledgehammer to crack the walnut which is the UK mobile market and acquire O2."
AstraZeneca dropped 29p to 2,639p after its second biggest selling drug, Seroquel, received the first challenge to its patent in the US. Lehman Brothers was heard telling its clients that Sir Gerry Robinson has a very real possibility of becoming executive chairman of Rentokil Initial, off 0.25p at 168p. The US broker said: "We believe Sir Gerry has already provided enough differentiation on core strategy to offer a real alternative to the current executive management." Partygaming lost 0.25p to 95.5p amid talk it may be interested in buying Betfair. Dealers continued to report rumours of a major takeover in the engineering sector. Cookson, 8p stronger at 327.5p, was the latest name to be talked of as vulnerable to a foreign bid.
Marconi added 12.25p to 317.25p as traders piled into the telecom equipment maker in the hope it will soon be bought by China's Huawei Technologies. Burren Energy dropped 6.5p to 839.5p after a number of its early stage private equity backers sold down their shareholdings in the oil and gas explorer. In total, the private equity players sold 12 million shares at 825p via KBC Peel Hunt and Seymour Pierce. Burren floated in 2003 at 130p.
Among smaller companies, SQS Software was unchanged at 201.5p despite talk that the recently floated company is closing to securing a significant new business win. Airsprung Furniture, off 1.5p to 21p, saw Tony Lisanti, its chief executive, disclose the purchase of 3.5 million shares. Stuart Lyons, the group's chairman, bought a more modest 1.1 million shares. Brokers also reported director share buying at Montpellier, 1p higher at 36p. Brian May, chief executive of the construction group, picked up 20,000 shares at 35.5p.
Finally, it emerged that the recent resignation of stock market operator Simon Cawkwell as a director of Kryso Resources was the result of a board room bust up caused by his trading activities. On 7 September, Mr Cawkwell, known in the market as Evil Knievil, stepped down as deputy chairman of the AIM listed Tajikistan gold explorer.
Yesterday, it became clear that he had been forced to do so after being found to have bought shares during Kryso's so called "closed period". During this period, usually in the run up to the date when a group is due to post results, company directors are prohibited from trading in its shares by Stock Exchange rules. Mr Cawkwell said he had made the mistake after forgetting the date when Kryso's results were due. Nevertheless, he retains a sizeable stake in the mining group.
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- Bank Of China
- Deutsche Bank
- Mergers And Acquisitions
- Rio Tinto Group
- Standard Chartered