Market Report: Anglo tops blue chips despite mine strife
Tuesday 02 October 2012
Angry miners and Anglo American will come face to face today. The long-running unrest in South Africa's platinum mining belt around the town of Rustenberg enters its next stage today when Anglo calls for its miners to attend a disciplinary hearing.
Following heightened tensions over the weekend, Anglo has said that if miners don't show up they will be forced to dismiss them. Workers' attendance rates are currently running at below 20 per cent.
Despite the strife, Anglo charged to the top of the blue-chip index, boosted by punters in the mood for risk. Anglo, which owns 80 per cent of Anglo American Platinum, jumped 74p to 1,891p.
The benchmark index managed to recover Friday's falls. News that Spain's banks need €59.3bn (£47.3bn) in extra cash last week was no worse than many expected and the FTSE 100 index was up by 78.38 points to 5,820.45, breaking through the supposedly crucial 5,800 mark which traders view as a key resistance line.
The appetite for risk was also helped by better-than-expected manufacturing figures in the US yesterday, while somewhat weak Asian data gave hope that further stimulus will follow.
The index was further lifted by the news that the long-awaited mining and commodities mega-merger of Glencore and Xstrata has finally been approved. Traders speculated that this could open the way for more takeover activity. Xstrata jumped up 22.5p to 980p while Glencore lost 1.1p to 342p.
What are the odds that the bookie William Hill will have to up its offer for Sportingbet? City scribblers reckon that any bidder will need to offer more than 60p a share for the online gaming group.
Panmure Gordon's Simon French said the small-cap stock is worth 61p and retained his buy rating.
William Hill, which last month revealed it was considering a joint move with Aim-listed GVC Holdings for Sportingbet, is rumoured to be thinking about raising its offer above 60p a share, having had its 52.5p-a-pop attempt rejected yesterday.
Mr French thinks the business, which will update the market tomorrow with full-year results, is worth more than 60p a share "excluding any bid speculation", and expects the results "to show the business continues to make strong underlying progress".
Sportingbet's shares edged up 2p to 53.5p. William Hill was up 1.9p to 318.7p and GVC Holdings lost 5p to 222.5p.
Popping to Tesco to pick up those last-minute, forgotten items on a Sunday is a pretty normal occurrence over here. But in South Korea it isn't as straightforward, and analysts think Sunday trading restrictions enforced this year have hit trade hard at the supermarket behemoth. Investec's Dave McCarthy said he expects Tesco's Asian profits to be down 5 per cent when the retailer reports its results tomorrow. Investec gives it a sell rating with a target share price of 295p.
Analysts' consensus forecasts for the retailer predict that profits could fall 10 per cent to £1.6bn in the first half, the first decline in profits since 1994. Shares stumbled 1p to 331p, while sector peers Sainsbury's and Morrisons also suffered, losing 1.7p to 345.8p and 1.3p to 283.9p respectively.
The UK banking sector got a boost from analysts at Liberum Capital, who raised their recommendations on Barclays, Lloyds and RBS as buys. Barclays jumped 7.5p to 222.35p, while Lloyds was up 1.15p to 39.98p and RBS climbed 9.4p to 266.4p.
The fashion group Supergroup was flying as it recovered some of last week's losses, strutting up 51.5p to 649p.
Workspace Group, the provider of offices for small businesses, rose 0.4p to 269.4p following the chief executive Jamie Hopkins' purchase of £300,000-worth of shares. The group plans to raise more than £50m via an issue of retail bonds to private investors, closing today.
Entertainment One, co-owner of Peppa Pig and distributor of the Twilight vampire franchise, has completed its deal to buy Alliance Films, which has the rights to a number of films including The King's Speech. Following the acquisition, the new shares placed as part of the deal began trading yesterday. Investec Securities scribes reckon the stock is a buy with a price target of 215p, but the shares retreated 7.25p to 163.25p.
FTSE 100 Risers
IAG 154.3p (up 5.3p, 3.56 per cent) The British Airways owner was up despite industry body Iata's forecast that European airlines will post the largest loss of any region as the number of premium and business-class passengers fall.
Schroders 1,572p (up 54p, 3.56 per cent) The fund manager was up with the wider financial sector as eurozone concerns eased. Jefferies scribes rated it a buy on Friday.
FTSE 100 Fallers
AstraZeneca 2,925p (down 30p, 1.02 per cent) The pharmaceuticals group has suspended its share repurchase programme. The drug maker will update the market when it reveals its 2012 results in January.
CRH 1,187p (down 5p, 0.42 per cent) Punters were worried about how France's tough budget could hit the cement maker's European operation. Europe makes up 50 per cent of its business.
FTSE 250 Risers
Ashstead 334.5p (up 10.7p, 3.3 per cent) Punters were piling into the equipment rental and plant hire group as it was boosted by strong manufacturing data from the US.
Hochschild 505p (up 19p, 3.91 per cent) The miner got the go-ahead for an environmental impact study in Peru. The Inmaculada project is expected to produce seven million "attributable silver equivalent" ounces a year.
FTSE 250 Fallers
ITE Group 204.5p (down 1.6p, 0.78 per cent) The exhibitions group saw its shares fall despite a fourth quarter update showing it is on track.
Provident Financial 1,355p (down 18p, 1.31 per cent) Despite getting an upgrade from analysts at RBC Capital, the doorstep lender was criticised by The Citizens Advice Bureau following findings in a Panorama documentary broadcast last night.
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