Market Report: Afren strikes oil off Nigeria to end slump

  • @Thompj

Investors in Afren had a day in the sun yesterday after the oil exploration firm made a major discovery off the coast of Nigeria. It has been an overcast year so far for shareholders, with Afren's shares having been on the slide. But yesterday it unveiled some successful drilling in Nigeria.

The company, which also operates in other African countries, including Ethiopia, Kenya, South Africa, Ghana and Tanzania, said that resources at the Ogo-1 well, off the coast of Nigeria, are "likely to be significantly in excess of previous estimates".

The discovery was its second recent one in Nigeria, although it has had another find in the Kurdistan region of Iraq.

This latest news helped to fire Afren up by 8.9p to 130.6p, shooting it to the top of the FTSE 250 leaderboard. Its chief executive and founder, Osman Shahenshah, said the discovery "opens up a new oil basin in an under-explored region". He added: "We look forward to working with our partners to realise the full potential of Ogo and our additional prospects on the licence."

Oil workers at Gulf Keystone Petroleum were also celebrating yesterday as the explorer said it had received approval for its Shaikan field well in Kurdistan. Gulf Keystone, which has also suffered a lacklustre year on the London market, jumped by 2.8p to 149.5p.

On the wider market, the FTSE 100 powered ahead by 63.6 points to 6,165.48.

It was also plain sailing for Carnival yesterday – a day after the cruise company said that its chief executive, Micky Arison, will step down after 34 years in the role. The reputation of Mr Arison, who is also the chairman of the Miami Heat, which last week won the US basketball championship, took a knock after the Costa Concordia sank off the coast of Italy last year. He will be replaced by Arnold Donald, a board member at the British American firm.

Traders jumped back on board, helping to buoy Carnival 28p to 2,319p.

Tour operator Thomas Cook was also a popular destination for investors yesterday, continuing its strong run since its chief executive, Harriet Green, took the helm. The share price hit a lowly 14.5p last summer before Ms Green joined but yesterday rose a further 6p to 121.8p.

On a warm day for the travel sectors, Thomas Cook's big rival Tui Travel was also up 7.1p to 351.7p. Tui, which owns the Thomson and First Choice brands, has also been in fine form this year with its stock up by nearly 25 per cent.

In the financial services, Aberdeen Asset Management soared by 17.2p to 378.3p after a bullish note from HSBC Global Research. Its analyst, Nitin Arora, said: "Aberdeen has a value-based investment approach and therefore, in periods when markets are very strong, its funds tend to underperform the benchmarks and when markets are going backwards, its funds tend to outperform the benchmarks. With markets pulling back, investment performance for Aberdeen Equity funds improved significantly in May." HSBC has slapped a share price target of 440p on Aberdeen.

On the high street, Ted Baker had a rare day to forget after its founder sold 1.2 million shares at 1,700p. Ray Kelvin, who is also the fashion brand's chief executive, made his £20.4m transaction for personal reasons, according to market sources. This took his shareholding down from 38.8 per cent to 36 per cent.

Boosted by new stores globally, Ted Baker recently posted a 32.7 per cent leap in revenues over the 20 weeks to 15 June, as shoppers from New York to Tokyo continued to bag its quirky designs. But Mr Kelvin's sale dragged it down by 47p to 1,680p yesterday.

The FTSE 250 wooden spoon went to Petropavlovsk, Russia' second-biggest gold miner, after a sharp fall in the price of the precious metal on global markets. Petropavlovsk lost its shine by 18.8p to 104.8p. The broking giant Icap was also out of favour. Icap's shares have rallied in 2013, following its profits tumbling by 20 per cent last year. But yesterday they fell by 33.2p to 353.6p.

Momentum ground to a halt for online grocer Ocado yesterday after traders took profits. Ocado has been a stock market darling since it struck a struck a 25-year, £170m deal in May to license its technology to the supermarket chain Morrisons. But Ocado, which delivers Waitrose and its own-label groceries, fell 9.4p to 269.4p.