Market Report: Dixons charges market with Net service float talk

DIXONS ELECTRIFIED a sleepy market yesterday as dealers speculated on an imminent flotation of its Internet service.

The TV and stereo retailer surged 52p to 1,189p as buyers moved back in after a period of underperformance. A Merrill Lynch recommendation helped but the story that gripped was that of a separate listing for web provider Freeserve.

Since its launch earlier this year, the free net service has laid plenty of golden eggs for Dixons. Investors' enthusiasm for Freeserve has been single-handedly responsible for a near-doubling in Dixons' share price to its April peak of 1,564p.

The shares have come back since, as copycat services have increased competition, and many experts argue that is the perfect time to realise Freeserve's value by floating a minority stake. A recent analysis by broker Schroders concluded that Dixons' Internet jewel is worth some 1,000p on its own and valuations of the whole of Freeserve range from pounds 1.8bn to pounds 3bn.

Reports of an earlier-than-expected end to analogue TV in favour of digital sets, which would boost Dixons' sales, also helped sentiment.

The rest of the market closed virtually unchanged after the much-awaited US employment numbers turned out to be a huge Atlantic damp squid.

The FTSE 100 ended 12.9 up at 6,361.5 after swinging wildly for much of the session. The contradictory message coming from the US figures caused a bit of chaos in the London dealing rooms. The blue-chip index plunged 74 points straight after the data's release as traders thought that bearish average earnings numbers would trigger a hike in US rates. But after Wall Street opened higher, on the back of benign unemployment figures, London staged a minor rally. The smaller indices followed the leader, with the midcap closing 21.3 higher at 5,740.9 and the Small Cap ending 8.7 better at 2,560.8.

Proposals by index provider FTSE International to bring index weightings in line with companies' free float caused a bit of a scare among blue- chips. Some big hitters with a small portion of shares available to investors could face expulsion from the FTSE 100 if the plans are approved.

BSkyB - with a 35 per cent free float - shed 11.5p to 569.5p. Telewest also suffered, losing 7p to 270.5p. Associated British Foods, where the Weston family has 51 per cent, was down for most of the day before some late trades pushed it 2p higher to 455p. Tightly-held Schroders crashed 41p to 1,370p. Similar proposals on cross-holdings sent Energis - the telecoms group where National Grid has a 48 per cent stake - 24p lower to 1,555p.

Halifax was prominent among the rising blue-chips. The bank jumped 26.5p to 876.5p. There was a whisper of corporate action in the consolidating sector. Another reason for the rise was a series of tiny deals at 875p in the last five minutes of trading, probably the result of some end-of- the-week book squaring.

Rival NatWest banked a a 23p rise to 1,453p after a meeting with Goldman Sachs. Merrill Lynch is also said to be considering an upgrade.

Buyers seemed to like companies due to report results next week. Scottish & Southern Energy, figures on Wednesday, firmed 187.5p to 618.5p, while transport group Stagecoach travelled 6.25p higher to 215p ahead of Tuesday's numbers. Severn Trent, also due on Tuesday, sloshed 28p up to 984p, while GEC, reporting on Thursday, was 16.5p better at 616.5p.

Shell flared 5p higher to 467.75p on talk of a tie-up with BG, up 2.25p to 355.75p, while fellow bid favourite Lloyds TSB fell 10.5p to 843.5p in big volume as hopes of a strike for Legal & General, up 0.75p to 180.25p, receded. Unilever gave up 6.25p to 541.5p following trading problems at rival Procter & Gamble.

The plant hire group Ashtead soared another 21.5p to 199p following Thursday's big rise. A stock overhang has been cleared and there are bid rumours. Developer Great Portland jumped 13p to 26.5p on Credit Lyonnais support and takeover talk.

Restructuring moves helped paper group Arjo Wiggins 16p higher to 193.5p. Pub group Greenalls, up 22.5p to 366.5, was back in the takeover frame, as was United Assurance, up 19.5p to 421.5p.

First Choice continued to go south, shedding 19.5p to 203.5p as the bid from Airtours, down 7p to 512.5p, was mired in competition worries. Express Dairies was milked 3p lower to 124.5p after the UK monopoly regulator sought comments on the purchase of rival Glanbia's UK unit. Textile tiddler Hicking Pentecost knitted a 48p jump to 175.5p after receiving a 175p- per-share offer from US rival Ruddick Corporation. A counterbid is possible.

Computer group Tadpole Technology jumped 3.25p to 21.25p after winning a $1.2m contract from the US government. Lighting company Emess buzzed 3.75p to 27.25p after the pounds 38m sale of its emergency lights division to rival Cooper.

The money could be used to redeem Emess' preferences shares. Engineer Domnick Hunter plunged 49p to 202.5p after a profit warning. Internet name provider Net Benefit debuted on AIM with a 75p rise to 275p, netting a pounds 5.7m paper profit for managing director Jonathan Robinson.

SEAQ VOLUME: 914.8M

SEAQ TRADES: 64,592

GILTS INDEX: N/A

REGALIAN PROPERTIES, the real estate tiddler, moved 3p higher to 26.5p yesterday amid growing optimism on its portfolio.

Market watchers that believe Regalian is set to benefit from an upturn in the London housing market.

The company owns several properties in prime locations in the capital.

A good performance in London could help the shares to move back towards the 33.75p peak reached last summer.

THERE ARE rumours that the TV and leisure group giant Granada is preparing a revamp of its Forte Posthouse hotel chain.

The company is apparently planning to spend pounds 100m on upgrading the chain's 84 properties. The plans could be unveiled at next week's interims. According to Travel Weekly, Granada is banking on the refurbishment to take market share in the three-star hotel market from Stakis, recently bought by Hilton.

Voices
voices
Life and Style
Upright, everything’s all right (to a point): remaining on one’s feet has its health benefits – though in moderation
HealthIf sitting is bad for your health, what happens when you stay on your feet for a whole month?
Arts and Entertainment
Peter Griffin holds forth in The Simpsons Family Guy crossover episode
arts + ents
Sport
Laura Trott with her gold
Commonwealth GamesJust 48 hours earlier cyclist was under the care of a doctor
PROMOTED VIDEO
Arts and Entertainment
Gal Gadot as Wonder Woman
arts + entsFilmmaker posted a picture of Israeli actress Gal Gadot on Twitter
News
Bryan had a bracelet given to him by his late father stolen during the raid
people
Arts and Entertainment
Chris Pratt stars in Guardians of the Galaxy
arts + ents
Arts and Entertainment
Pedro Pascal gives a weird look at the camera in the blooper reel
arts + entsPrince Oberyn nearly sets himself on fire with a flaming torch
News
Danny Nickerson, 6, has received 15,000 cards and presents from well-wishers around the world
newsDanny loves to see his name on paper, so his mother put out a request for cards - it went viral
News
ebookA unique anthology of reporting and analysis of a crucial period of history
Sport
France striker Loic Remy
sportThe QPR striker flew to Boston earlier in the week to complete deal
News
Orville and Keith Harris. He covered up his condition by getting people to read out scripts to him
People
Arts and Entertainment
Zoe Saldana stars in this summer's big hope Guardians of the Galaxy
filmHollywood's summer blockbusters are no longer money-spinners
Arts and Entertainment
O'Shaughnessy pictured at the Unicorn Theatre in London
tvFiona O'Shaughnessy explains where she ends and her strange and wonderful character begins
Life and Style
Workers in Seattle are paid 100 times as much as workers in Bangladesh
fashionSeattle company lets customers create their own clothes, then click 'buy' and wait for delivery
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Application Support Analyst / Junior SQL Server DBA

£40000 - £45000 per annum: Ashdown Group: An established professional services...

Senior Risk Manager - Banking - London - £650

£600 - £650 per day: Orgtel: Conduct Risk Liaison Manager - Banking - London -...

The benefits of being in Recruitment at SThree...

£18000 - £23000 per annum + Comission: SThree: SThree, International Recruitme...

Test Analyst - UAT - Credit Risk

£280 - £300 per day + competitive: Orgtel: Test Analyst, Edinburgh, Credit Ris...

Day In a Page

A new Russian revolution: Cracks start to appear in Putin’s Kremlin power bloc

A new Russian revolution

Cracks start to appear in Putin’s Kremlin power bloc
Eugene de Kock: Apartheid’s sadistic killer that his country cannot forgive

Apartheid’s sadistic killer that his country cannot forgive

The debate rages in South Africa over whether Eugene de Kock should ever be released from jail
Standing my ground: If sitting is bad for your health, what happens when you stay on your feet for a whole month?

Standing my ground

If sitting is bad for your health, what happens when you stay on your feet for a whole month?
Commonwealth Games 2014: Dai Greene prays for chance to rebuild after injury agony

Greene prays for chance to rebuild after injury agony

Welsh hurdler was World, European and Commonwealth champion, but then the injuries crept in
Israel-Gaza conflict: Secret report helps Israelis to hide facts

Patrick Cockburn: Secret report helps Israel to hide facts

The slickness of Israel's spokesmen is rooted in directions set down by pollster Frank Luntz
The man who dared to go on holiday

The man who dared to go on holiday

New York's mayor has taken a vacation - in a nation that has still to enforce paid leave, it caused quite a stir, reports Rupert Cornwell
Best comedians: How the professionals go about their funny business, from Sarah Millican to Marcus Brigstocke

Best comedians: How the professionals go about their funny business

For all those wanting to know how stand-ups keep standing, here are some of the best moments
The Guest List 2014: Forget the Man Booker longlist, Literary Editor Katy Guest offers her alternative picks

The Guest List 2014

Forget the Man Booker longlist, Literary Editor Katy Guest offers her alternative picks
Jokes on Hollywood: 'With comedy film audiences shrinking, it’s time to move on'

Jokes on Hollywood

With comedy film audiences shrinking, it’s time to move on
It's the best of British art... but not all is on display

It's the best of British art... but not all is on display

Voted for by the British public, the artworks on Art Everywhere posters may be the only place where they can be seen
Critic claims 'I was the inspiration for Blanche DuBois'

Critic claims 'I was the inspiration for Blanche DuBois'

Blanche Marvin reveals how Tennessee Williams used her name and an off-the-cuff remark to create an iconic character
Sometimes it's hard to be a literary novelist

Sometimes it's hard to be a literary novelist

Websites offering your ebooks for nothing is only the latest disrespect the modern writer is subjected to, says DJ Taylor
Edinburgh Fringe 2014: The comedy highlights, from Bridget Christie to Jack Dee

Edinburgh Fringe 2014

The comedy highlights, from Bridget Christie to Jack Dee
Dame Jenny Abramsky: 'We have to rethink. If not, museums and parks will close'

Dame Jenny Abramsky: 'We have to rethink. If not, museums and parks will close'

The woman stepping down as chair of the Heritage Lottery Fund is worried