Market Report: Takeover rumours help Misys recover ground

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The Independent Online

So who might be interested in buying Misys? According to the talk, Oracle of the US or the German software giant SAP would be interested. But software sector analysts were far from convinced by the gossip. Kevin Ashton, at Bridgewell Securities, told investors not to expect Oracle to bid. He was also sceptical about rumours that Misys might be about to sell its financial services division Sesame. Such a deal is more likely to happen sometime next year, he said.

The Bridgewell analyst is bullish about the group's long-term prospects. He predicts big changes are on the way at the company, which should boost its share price. "There is substantial shareholder activism still going on behind the scenes and investors are still looking for Kevin Lomax to split his chairman and chief executive roles sooner than the planned 2008,"Mr Ashton said.

An uninspiring start to trading on Wall Street weighed on the FTSE 100, which closed 10.1 points lower at 5,362.3, and the FTSE 250, off 34.3 points at 7,743. Merrill Lynch tipped the European pharmaceuticals sector to be a strong performer over the next six to 12 months. It pointed out that the industry is viewed traditionally as a defensive investment and suggested the numerous concerns about the global economy at present will only support valuations across the sector. The comments had a mixed effect on London-listed pharmaceutical players. AstraZeneca rose 15p to 2,767p, GlaxoSmithKline ticked 11p better to 1,465p, but Shire Pharmaceuticals lost 7.5p to 673.5p.

Cable & Wireless slumped 20p to 121.75p after the alternative telecoms carrier warned of weakening profits margins at its retail business and of a possible delay in the approval of its merger with Energis. Dealers said shares in C&W had been hit particularly hard because many investors feel the company is likely to lose its FTSE 100 status at December's quarterly review of the make-up of the blue-chip index.

Ejection from the FTSE 100 is followed by heavy selling of a stock by tracker funds, whose job it is to mirror exactly the performance of blue chips. The setback at C&W also hit the wider telecoms sector. Colt Telecom lost 2.75p to 57.25p, Thus gave up 0.25p to 14.25p, Kingston Communications retreated 2p to 58p and Telecom Plus dropped 2.5p to 130.5p.

The online gaming sector suffered another day of falls. PartyGaming dropped 5.5p to a new all-time low of 80p, 888 Holdings lost 0.75p to 161.25p, while World Gaming fell 8.5p to 168p. Ukbetting bucked the negative trend, gaining 4p to 57p, as bid rumours once again surrounded the group. For the past few weeks, dealers have reported whispers that the companycould be the first of the sector's smaller players to be taken over.

EMI dropped 9.5p to 234p after a presentation to analysts by a rival music group UMG, owned by Vivendi Universal, hit sentiment towards EMI. UMG said it expects to sell fewer albums in the second half of this year because of the smaller number of big releases.

The French entrepreneur Vincent Bolloré increased his stake in Aegis, off 1p at 142.75p, to 13.3 per cent. Filtronic dropped 3.5p to 269.5p after Alan Needle, an executive director at the group, announced he had sold the bulk of his stake in the group. Mr Needle disposed of 200,000 shares at 270p.

De La Rue was boosted by an upgrade from Dresdner Kleinwort Wasserstein. The German broker raised its stance on the banknote printer to "add" from "hold" and this helped the stock register an 11.25p jump to 385p. Dresdner is convinced that trading at De La Rue is stronger than most in the City are forecasting.

Deal Group Media ticked 0.25p higher to 6.75p after Adrian Moss, the chief executive of the online advertising specialist, picked up 1.5 million shares at 6.5p. Turbo Genset added 0.75p to 13p after securing a £500,000 contract from Ned Train, the Dutch train operator.

Northern Petroleum crashed 25 per cent, or 14p, to 42.5p after revealing that the second of its wells on the Isle of Man has been a failure. This brings to an end the company's 2005 drilling programme.

Finally, the healthcare group Tristel held steady at 47p despite a substantial share sale by its chairman, Francisco Soler. Mr Soler bagged £540,000 through the disposal of 1.2 million shares at 45p. The company, which floated at the start of the summer at 37p, boasts a range of medical instrument disinfectants.