Market Report: Arm legs it up the Footsie after impressing analysts
While one British tech success story found itself under attack, another was being given a standing ovation yesterday. After US giant Hewlett-Packard admitted that revenues from its £7bn acquisition Autonomy had been "very disappointing", Arm Holdings powered up after impressing scribblers in the Square Mile.
Itself often talked about as a potential takeover target, the Cambridge-based chip designer hosted a day for both analysts and investors on Wednesday in the middle of London and, judging from the response, it seemed to have done the job.
"Rarely have we seen such an attractive investment case," gushed Peel Hunt's Paul Morland, who added that Arm – whose technology is found in both Apple's iPad and iPhone – was a "must-have stock".
He was not the only one advising punters to snap up the stock. Scribes from Investec, Numis and Morgan Stanley were also among those full of praise, although not everyone was so optimistic.
Arm's share price may have lost nearly a fifth since April, but JP Morgan's scribes said they were waiting "for a better entry point". Still, investors sided with the bulls as the group closed 12.8p higher at 495.2p.
A volatile week for the FTSE 100 continued as, after shedding nearly 140 points on Wednesday, the benchmark index shot up 83.64 points to 5,350.05.
Still, with the latest GDP numbers proving disappointing and unimpressive economic data from the eurozone, the mood was hardly carefree.
Although blue-chip losers were definitely a minority, it was a mixed day for the miners following poor manufacturing data from China, with Antofagasta down 5p at 1,027p and Eurasian Natural Resources creeping back 0.1p to 460.6p.
BHP Billiton and Rio Tinto – who rose 37.5p to 1,718.5p and 48p to 2,838.5p respectively – were both being recommended by Jefferies' Christopher LaFemina as long-term investments. Meanwhile, yellow metal digger Randgold Resources jumped by 383p to 5,170p as the price of gold attempted to rally.
On the one-year anniversary of the start of official trading in Glencore's shares, the commodities trader looked as if it was going to set another all-time low. However, by the bell it had managed to edge up 2.35p to 346p – still, a long way from the 530p at which it floated.
There was no end to the pain for HomeServe on the FTSE 250. The emergency plumber, which admitted this week it was being investigated by the Financial Services Authority over possible mis-selling, dipped 7.1p to 144p after Panmure Gordon's Andy Brown slashed his target price by 45p to 145p, saying he struggled "to see any upside" until the probe was over.
Cable & Wireless Communications may have announced it was cutting its dividend in half, but – with this having been widely expected – it did not stop the telecoms group flying up 4.95p, or 17.64 per cent, to 33.01p after its final results. Traders weren't particularly shocked by the size of the move, however, noting the smashing the stock has recently received.
Elsewhere, haulier Stobart ticked up 3.7p to 114p following the news that it was talking to Autologic (3.25p stronger at 14.75p) over making a possible takeover approach for the Aim-listed logistics group.
It seems the current, economic environment means owners are keener to keep a tighter rein on their spending than on their pets. Veterinary medicines firm Animalcare issued a profits warning yesterday as the group fell 24p to 146p on Aim, blaming the fact that sales from its microchip business for cats, dogs and other pets were down by almost a third over the financial year so far.
Long-suffering punters in ATH Resources were once again watching its share price plummet. The British miner, which last year was involved in unsuccessful bid talks, admitted that the low price of coal meant it was delaying the extension of its Glenmuckloch site in Scotland, prompting it down 3p to 10.25p.
Having received a 240p-a-share takeover approach from Thailand's PTT earlier in the week, Mozambique driller Cove Energy was up another 3.5p to 253.5p. Oil giant Royal Dutch Shell (36p higher at 2,075p), whichhas made an offer worth 220p, said it was thinking over what its next step would be
Meanwhile, fellow explorer Ithaca Energy powered up 7p to 172.5p as traders noted that – with the explorer saying earlier in the month that an update on its potential takeover talks would be announced within four weeks – the deadline was not too far away.
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