Market Report: Approach doubts hit Chemring price

Traders were in a defensive mood yesterday as volumes hovered around annual August lows and defence stocks found themselves in focus. Chemring, the military equipment maker, was the FTSE 250's biggest faller, down 40.8p to 373.9p, as doubt emerged about Carlyle's approach coming to fruition. The US private-equity firm admitted its interest in Chemring last Friday but scribes at UBS reiterated that it is still "highly preliminary".

Oriel Securities upgraded Chemring from reduce to add, raising its target price from 375p to 450p and said trade buyers may yet come out of the woodwork. Carlyle now has until 14 September to either make an offer or walk away.

Amid another eerily quiet August day, traders at least had a new bid story to spin with speculation emerging around Senior, the mid-cap engineer that specialises in the aerospace sector.

A 4.7p rise in Senior's share price to 212.4p was accompanied by vague rumours that a possible bidder could be sniffing around – with the whispers suggesting Boeing and Rolls-Royce as potential suitors. Experts admit the aerospace sector is certainly of interest at the moment. But City voices urged caution – if there really was a bidder behind the scenes the price would have been pushed up far higher.

The top riser in the FTSE 250 was Argos-to-Homebase owner Home Retail Group. Analysts at Deutsche upgraded the retailer from sell to hold due to the "downside risks" reducing and the "stabilisation of profits" at Argos.

The FTSE 100 was down 28 points to 5824.37 with miners the biggest fallers.

Analysts warn mining stocks will continue their underperformance for the rest of the year.

Chris Beauchamp, an analyst at IG Index, said: "The heavyweight element of the UK mining sector has made the FTSE 100 index underperform this year. With the outlook for miners still being bleak … this will mean that the British benchmark index lags behind other indices."

The long-running saga of the world's largest merger took another twist when Qatar Holding continued to snap up shares in Xstrata.

It left the $30bn (£19bn) bid by Glencore for the mining giant looking more unlikely to happen.

Xstrata fell 31.8p to 907.5p while Glencore, which already owns 34 per cent of Xstrata, was up 1.6p to 353.8p.

The Qatari state investment fund has been buying more shares over the past two weeks, with the latest disclosure taking its stake to more than 11.7 per cent. Glencore's bid values each Xstrata share at 2.8 Glencore shares, but the Qataris are demanding 3.25. Both share prices have taken a battering, falling around 29 per cent since highs in February – meaning the share ratio has remained the same.

Glencore's chief executive Ivan Glasenberg has remained resolute on the bid price, arguing falling commodity prices have taken their toll.

Glencore updates the market with first-half results today.

Qatar joins shareholders, including Standard Life and Legal & General, who are against the mega-merger. The deal needs 75 per cent approval at the vote on 7 September.

In France, the shock news of the weekend was the sudden death on Friday of Pernod Ricard chairman Patrick Ricard.

Mr Ricard, 67, stepped down from his chief executive position at the drinks business in 2008. The son of the company's founder, Mr Ricard was credited with taking the firm global so it is now only second to Diageo.

Shares in Diageo rose 0.5p to 1,687p today with thirsty City traders expecting it to confirm its purchase of the Jose Cuervo tequila business in a $3bn (£1.9bn) cash and shares deal at its results on Thursday, or at least within the next month.

Turning to the small-cap index, speculative bid chatter for online betting group Sportingbet continued from last week. Shares rose 3.25p to 40.75p. The betting group had been approached by Ladbrokes in 2011 but the negotiations came to nothing last autumn.

Over on Plus, Arsenal Football Club confirmed the sale of Cameroon midfielder Alex Song for £15m to Barcelona – the latest player out the door – but the tightly traded share price only fell 0.5 per cent.

PROMOTED VIDEO
News
Susan Sarandon described David Bowie as
peopleSusan Sarandon reveals more on her David Bowie romance
Sport
Lewis Hamilton walks back to the pit lane with his Mercedes burning in the background
Formula 1
Arts and Entertainment
The new characters were announced yesterday at San Diego Comic Con
comic-con 2014
Sport
Arsenal supporters gather for a recent ‘fan party’ in New Jersey
football
Arts and Entertainment
No Devotion's Geoff Rickly and Stuart Richardson
musicReview: No Devotion, O2 Academy Islington, London
News
i100
Sport
sportDidier Drogba returns to Chelsea on one-year deal
Arts and Entertainment
The Secret Cinema performance of Back to the Future has been cancelled again
film
News
ebookA unique anthology of reporting and analysis of a crucial period of history
News
newsComedy club forced to apologise as maggots eating a dead pigeon fall out of air-conditioning
Life and Style
Balmain's autumn/winter 2014 campaign, shot by Mario Sorrenti and featuring Binx Walton, Cara Delevingne, Jourdan Dunn, Ysaunny Brito, Issa Lish and Kayla Scott
fashionHow Olivier Rousteing is revitalising the house of Balmain
News
i100
Arts and Entertainment
Christian Grey cradles Ana in the Fifty Shades of Grey film
filmFifty Shades of Grey trailer provokes moral outrage in US
News
people
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

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...

Trainee Recruitment Consultants - Banking & Finance

£20000 - £25000 per annum + OTE £40,000: SThree: SThree Group have been well e...

Day In a Page

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
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
Edinburgh Fringe 2014: The comedy highlights, from Bridget Christie to Jack Dee

Edinburgh Fringe 2014

The comedy highlights, from Bridget Christie to Jack Dee
Evan Davis: The BBC’s wolf in sheep’s clothing to take over at Newsnight

The BBC’s wolf in sheep’s clothing

What will Evan Davis be like on Newsnight?
Finding the names for America’s shame: What happens to the immigrants crossing the US-Mexico border without documents who never make it past the Arizona desert?

Finding the names for America’s shame

The immigrants crossing the US-Mexico border without documents who never make it past the Arizona desert
Inside a church for Born Again Christians: Speaking to God in a Manchester multiplex

Inside a church for Born Again Christians

As Britain's Anglican church struggles to establish its modern identity, one branch of Christianity is booming
Rihanna, Kim Kardashian and me: How Olivier Rousteing is revitalising the house of Balmain

Olivier Rousteing is revitalising the house of Balmain

Parisian couturier Pierre Balmain made his name dressing the mid-century jet set. Today, Olivier Rousteing – heir to the house Pierre built – is celebrating their 21st-century equivalents. The result? Nothing short of Balmania
Cancer, cardiac arrest, HIV and homelessness - and he's only 39

Incredible survival story of David Tovey

Tovey went from cooking for the Queen to rifling through bins for his supper. His is a startling story of endurance against the odds – and of a social safety net failing at every turn
Backhanders, bribery and abuses of power have soared in China as economy surges

Bribery and abuses of power soar in China

The bribery is fuelled by the surge in China's economy but the rules of corruption are subtle and unspoken, finds Evan Osnos, as he learns the dark arts from a master
Commonwealth Games 2014: Highland terriers stole the show at the opening ceremony

Highland terriers steal the show at opening ceremony

Gillian Orr explores why a dog loved by film stars and presidents is finally having its day
German art world rocked as artists use renowned fat sculpture to distil schnapps

Brewing the fat from artwork angers widow of sculptor

Part of Joseph Beuys' 1982 sculpture 'Fettecke' used to distil schnapps
BBC's The Secret History of Our Streets reveals a fascinating window into Britain's past

BBC takes viewers back down memory lane

The Secret History of Our Streets, which returns with three films looking at Scottish streets, is the inverse of Benefits Street - delivering warmth instead of cynicism
Joe, film review: Nicolas Cage delivers an astonishing performance in low budget drama

Nicolas Cage shines in low-budget drama Joe

Cage plays an ex-con in David Gordon Green's independent drama, which has been adapted from a novel by Larry Brown
How to make your own gourmet ice lollies, granitas, slushy cocktails and frozen yoghurt

Make your own ice lollies and frozen yoghurt

Think outside the cool box for this summer's tempting frozen treats
Ford Fiesta is UK's most popular car of all-time, with sales topping 4.1 million since 1976

Fiesta is UK's most popular car of all-time

Sales have topped 4.1 million since 1976. To celebrate this milestone, four Independent writers recall their Fiestas with pride