Market Report: Asset manager fears prove groundless

Some investors feared that a shake-up in the way we save and invest could hit asset managers where it hurts: fees. Scribblers at Citi were so concerned last year that they rated Hargreaves Lansdown a sell. But these fears were allayed when Barclays' analysts broadcast their enthusiasm.

Punters feared that profitable asset managers would be few and far between after the abolition of commission, thanks to the introduction of the Retail Distribution Review (RDR) at the start of this year. They thought the impact would be so severe on firms like Bristol-based Hargreaves that it would be better to sell out. But six weeks into life with RDR and asset managers are still breathing. In fact, with the stock market making a recovery, the share price of asset managers could be benefiting from canny investors who spotted that they do well when equities are in favour.

Barclays called on punters to buy shares in Hargreaves in this "post-RDR world" and upped their share price target to 820p from 800p. The shares responded with a 40p gain to 734.5p – top of the tree on the benchmark index.

Meanwhile Aberdeen Asset Management, which Barclays thinks has "superior revenue trends", added 6.2p to 407.3p.

For mid-cap index Jupiter, the big problems are "key man risk and declining revenue margin", but Barclays thinks its "strong management team is negotiating these challenges well" and it put on 8.1p to 337.7p.

Hargreaves was closely followed at the top of the blue-chip index by the Kazakh miner Eurasian Natural Resources Corporation. The group has been surrounded by bid speculation for the past few months and idle traders thought another suitor could be ready to make its intentions known and the shares lifted 14.9p to 344.2p.

The oil explorer Afren has been in focus after numerous reports that it is selling its Kurdistan and east African assets. A variety of bidders have been mooted, including China's Sinopec and the US giant Exxon. One trader even thought a bid could still come in for the entire company at about 220p a share. The shares were off 3.2p to 152.9p.

The oil and gas specialist BG Group was also getting attention after its fourth-quarter update. Investec Securities analysts warn that it is still time to sell the shares despite the update being in line with expectations. BG lowered guidance on 2013 production and liquid gas profits, and Investec has placed its forecasts under review. It gives the shares a sell with a 1,000p share price target. But investors thought the stock still looked cheap, and it added 38p to 1,142p on the top flight index.

A big sell-off on Monday – generated by profit takers – did not continue as investors brushed off eurozone concerns. The FTSE 100 index added 35.92 points to 6,282.76 – but not enough to recover from the previous day's 100-plus point loss.

Italy wanted a word with London – Italian financial regulators are reported to have asked the Financial Services Authority to investigate a sale of shares in Europe's biggest oil services company Saipem before a profit warning last week. Italy's Consob is said to have asked the FSA to look into the timing of the sale and who sold the shares. Saipem's shares lost more than a third after the profit warning last week.

Liberum Capital's Charlie Campbell was keen on housebuilders, and despite a share price rally Barratt's exposure to the lucrative London and the South-east housing markets make it worth buying, Mr Campbell said. He gave it a 259p share price target, and the shares built up a 2.4p gain to 219.9p.

The materials group Low & Bonar, which made the materials for the O2 Arena roof at Greenwich, was hit by a slowdown in demand for artificial grass, and pre-tax profits fell to £6.1m. But it increased its full-year dividend by 14 per cent, and the shares produced a 4.25p gain to 61.75p.

One share transaction got brokers chatting about London Capital Group. A notification that 1.4 million shares in the owner of Capital Spreads had changed hands prompted the market to question who may have sold out of the spread betting firm, but informed sources nixed talk of director's deals. The shares edged up 0.25p to 34.25p.

Suggested Topics
Start your day with The Independent, sign up for daily news emails
Arts and Entertainment
tvPoldark, TV review
Arts and Entertainment
Cassetteboy's latest video is called Emperor's New Clothes rap
videoThe political parody genius duo strike again with new video
Arts and Entertainment
Louis Theroux: By Reason of Insanity takes him behind the bars again
tvBy Reason of Insanity, TV review
News
Lois Pryce... Life Without a Postcode. Lois lives on a boat with her husband.. Registering to vote in the election has prooved to be very difficult without a fixed residential post code. (David Sandison)
newsHow living on a houseboat meant I didn't officially 'exist'
ebooks
ebooksA special investigation by Andy McSmith
  • Get to the point
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

Recruitment Genius: Retirement Coordinator - Financial Services

Negotiable: Recruitment Genius: To provide a prompt, friendly and efficient se...

Recruitment Genius: Annuities / Pensions Administrator

Negotiable: Recruitment Genius: You will be the first point of contact for all...

Ashdown Group: HR, Payroll & Benefits Officer - Altrincham - up to £24,000.

£18000 - £24000 per annum + benefits: Ashdown Group: HR, Payroll & Benefits Of...

Ashdown Group: Learning and Development Programme Manager

£35000 - £38000 per annum + benefits : Ashdown Group: A highly successful, int...

Day In a Page

Election 2015: How many of the Government's coalition agreement promises have been kept?

Promises, promises

But how many coalition agreement pledges have been kept?
The Gaza fisherman who built his own reef - and was shot dead there by an Israeli gunboat

The death of a Gaza fisherman

He built his own reef, and was fatally shot there by an Israeli gunboat
Saudi Arabia's airstrikes in Yemen are fuelling the Gulf's fire

Saudi airstrikes are fuelling the Gulf's fire

Arab intervention in Yemen risks entrenching Sunni-Shia divide and handing a victory to Isis, says Patrick Cockburn
Zayn Malik's departure from One Direction shows the perils of fame in the age of social media

The only direction Zayn could go

We wince at the anguish of One Direction's fans, but Malik's departure shows the perils of fame in the age of social media
Young Magician of the Year 2015: Meet the schoolgirl from Newcastle who has her heart set on being the competition's first female winner

Spells like teen spirit

A 16-year-old from Newcastle has set her heart on being the first female to win Young Magician of the Year. Jonathan Owen meets her
Jonathan Anderson: If fashion is a cycle, this young man knows just how to ride it

If fashion is a cycle, this young man knows just how to ride it

British designer Jonathan Anderson is putting his stamp on venerable house Loewe
Number plates scheme could provide a licence to offend in the land of the free

Licence to offend in the land of the free

Cash-strapped states have hit on a way of making money out of drivers that may be in collision with the First Amendment, says Rupert Cornwell
From farm to fork: Meet the Cornish fishermen, vegetable-growers and butchers causing a stir in London's top restaurants

From farm to fork in Cornwall

One man is bringing together Cornwall's most accomplished growers, fishermen and butchers with London's best chefs to put the finest, freshest produce on the plates of some of the country’s best restaurants
Robert Parker interview: The world's top wine critic on tasting 10,000 bottles a year, absurd drinking notes and New World wannabes

Robert Parker interview

The world's top wine critic on tasting 10,000 bottles a year, absurd drinking notes and New World wannabes
Don't believe the stereotype - or should you?

Don't believe the stereotype - or should you?

We exaggerate regional traits and turn them into jokes - and those on the receiving end are in on it too, says DJ Taylor
How to make your own Easter egg: Willie Harcourt-Cooze shares his chocolate recipes

How to make your own Easter egg

Willie Harcourt-Cooze talks about his love affair with 'cacao' - and creates an Easter egg especially for The Independent on Sunday
Bill Granger recipes: Our chef declares barbecue season open with his twist on a tradtional Easter Sunday lamb lunch

Bill Granger's twist on Easter Sunday lunch

Next weekend, our chef plans to return to his Aussie roots by firing up the barbecue
Joe Marler: 'It's the way I think the game should be played'

Joe Marler: 'It's the way I think the game should be played'

The England prop relives the highs and lows of last Saturday's remarkable afternoon of Six Nations rugby
Cricket World Cup 2015: Has the success of the tournament spelt the end for Test matches?

Cricket World Cup 2015

Has the success of the tournament spelt the end for Test matches?
The Last Word: Justin Gatlin knows the price of everything, the value of nothing

Michael Calvin's Last Word

Justin Gatlin knows the price of everything, the value of nothing