Market Report: BT looks bright but market still gloomy

Punters were dialling up their brokers yesterday to buy into BT as regulator Ofcom published proposals that could make the UK telecoms giant £150m better off. Ofcom said it had found errors in how the charges were calculated and yesterday republished the price controls for 2014 to 2017 for line rental access to the telephone exchanges.

Analysts at Jefferies said Ofcom's proposals are now "more benign" and could mean another £50m in earnings in 2014 which could reach £150m by 2016/2017.

Not only were the better pricing rules good news for BT, but Jefferies' Giles Thorne and his team said last week's TV wholesale deal with Virgin Media – whereby BT's new sports channels will available to Virgin customers – is also a big boost for the group. Jefferies rated BT a buy with a 385p price target and said the "two recent developments offer upside to forecasts". The shares were called up 6p to 328.2p. The group yesterday also confirmed the start date for Gavin Patterson, the new chief executive to replace Ian Livingston, who is joining government in the role of Minister of State for Trade and Investment. Lord Livingston will stand down on 10 September.

Joining BT in the top three risers on the benchmark index, the broadcaster ITV got a boost from analysts at Morgan Stanley, who raised their target price to 185p, up from 175p. Morgan Stanley said ITV will benefit from the "potential UK advertising upswing on the back of an improving economy" and they revised their earnings forecast for the group that was 2.9p brighter at 161.9p.

The wider market continued its downward spiral as traders worried the end of monetary stimulus in the US would be signalled in today's minutes from the Federal Reserve's last rate-setting meeting. The FTSE 100 slumped during the day but recovered some of this fall and finished off 12.27 points at 6453.46.

The energy services group John Wood reported first-half profits up 17 per cent but it took the wooden spoon on the blue chips as it cut the profit outlook at its engineering division. It was 72p worse off at 831p.

Also among the worst performers was cement specialist CRH, off 32p to 1,394p. Its first-half results revealed a pre-tax loss of €71m. But analysts at Investec said that although the results were "somewhat disappointing", CRH is "attractive as an operationally geared play on the US". The shares were also said to have suffered following a wider construction sector sell-off on Monday that hit peers and dragged CRH down yesterday.

Over on the mid cap index a Scottish submarine rescuer became the place to sink cash as the rest of the market looked decidedly choppy. Marine services group James Fisher & Sons topped the mid-tier league table as it reported a 15 per cent jump in its first-half results to £19.4m, with sales up 7 per cent to £200.7m.

It got the thumbs-up from analysts at Investec and news of its profit rise, a sell-off of a boat business and a purchase of an underwater engineering outfit, got the rest of the City hooked.

Investec's John Lawson increased his rating to buy and said the marine engineer specialist "is benefiting from strong market conditions… around the world". He raised his target price to 1,085p and shares spurted 5.8 per cent – up 58.5p to 1,057p.

Cineworld has been ordered to sell three cinemas by the Competition Commission after its takeover of the arthouse Picturehouse chain. But yesterday it just lost 7p to 397.25p.

Industrial metals-maker Fiberweb advanced 5.25p to 92.75p on news of a takeover bid from Polymer Group. Polymer has until 17 September to make a formal offer or walk away.

Sports drinks-maker Science in Sport (Chris Hoy is a brand ambassador) floated on Aim earlier this month. Yesterday it emerged Richard Harpin, savvy investor and Homeserve chief executive, has bought a 3.9 per cent stake. Science was steady at 64.25p after floating at 56p.

Oil explorer Faroe Petroleum said it has agreed a deal for two oil companies to farm its licences in the Norwegian Sea to help it pay costs on another well, but it sank 4.5p to 129.25p.

Vague bid rumours that a private equity group is taking a look at Goals Soccer Centres helped the five-a-side specialist score a 1.5p gain to 158p. Last year a £73.1m bid from the Ontario Teachers' Pension Plan failed to get shareholder approval and the takeover deal collapsed.

Renewable energy tiddler Kedco updated shareholders on its working capital and a wind farm and biomass project, and it produced a 0.11p gain to 0.575p.

Start your day with The Independent, sign up for daily news emails
  • 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

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
The saffron censorship that governs India: Why national pride and religious sentiment trump freedom of expression

The saffron censorship that governs India

Zareer Masani reveals why national pride and religious sentiment trump freedom of expression
Prince Charles' 'black spider' letters to be published 'within weeks'

Prince Charles' 'black spider' letters to be published 'within weeks'

Supreme Court rules Dominic Grieve's ministerial veto was invalid
Distressed Zayn Malik fans are cutting themselves - how did fandom get so dark?

How did fandom get so dark?

Grief over Zayn Malik's exit from One Direction seemed amusing until stories of mass 'cutting' emerged. Experts tell Gillian Orr the distress is real, and the girls need support
The galaxy collisions that shed light on unseen parallel Universe

The cosmic collisions that have shed light on unseen parallel Universe

Dark matter study gives scientists insight into mystery of space
The Swedes are adding a gender-neutral pronoun to their dictionary

Swedes introduce gender-neutral pronoun

Why, asks Simon Usborne, must English still struggle awkwardly with the likes of 's/he' and 'they'?
Disney's mega money-making formula: 'Human' remakes of cartoon classics are part of a lucrative, long-term creative plan

Disney's mega money-making formula

'Human' remakes of cartoon classics are part of a lucrative, long-term creative plan
Lobster has gone mainstream with supermarket bargains for £10 or less - but is it any good?

Lobster has gone mainstream

Anthea Gerrie, raised on meaty specimens from the waters around Maine, reveals how to cook up an affordable feast
Easter 2015: 14 best decorations

14 best Easter decorations

Get into the Easter spirit with our pick of accessories, ornaments and tableware
Paul Scholes column: Gareth Bale would be a perfect fit at Manchester United and could turn them into serious title contenders next season

Paul Scholes column

Gareth Bale would be a perfect fit at Manchester United and could turn them into serious title contenders next season
Inside the Kansas greenhouses where Monsanto is 'playing God' with the future of the planet

The future of GM

The greenhouses where Monsanto 'plays God' with the future of the planet
Britain's mild winters could be numbered: why global warming is leaving UK chillier

Britain's mild winters could be numbered

Gulf Stream is slowing down faster than ever, scientists say
Government gives £250,000 to Independent appeal

Government gives £250,000 to Independent appeal

Donation brings total raised by Homeless Veterans campaign to at least £1.25m
Oh dear, the most borrowed book at Bank of England library doesn't inspire confidence

The most borrowed book at Bank of England library? Oh dear

The book's fifth edition is used for Edexcel exams
Cowslips vs honeysuckle: The hunt for the UK’s favourite wildflower

Cowslips vs honeysuckle

It's the hunt for UK’s favourite wildflower