Market Report: Budget hopes boost the mood around William Hill

William Hill was among the risers as the London market ended the week on a negative note, snapping its seven session-long winning streak last night.

The bookmaker was marked up by 6.6p to 184.2p after UBS, lamenting the sharp share price falls since the end of March, urged investors to buy into the stock. Beyond valuation, the broker said William Hill faced fairly limited risks from next week's emergency Budget. VAT might rise, and would be passed on to customers, but there is little prospect of significant changes to gaming duties.

"Under the previous administration, there were discussions on whether there would be a change in the methodology in the duty levied on gaming machines, but whether the new administration has had time to assess such a change in format is unlikely," UBS said, switching its stance on the stock to "buy" from "neutral", while keeping its target for the stock unchanged at 215p.

Overall, the FTSE 100 fell back, easing by 3.05 points to 5,250.84 as the recent rally finally ran out of steam. The FTSE 250 fared better, booking a rise of 88.9 points to 9,952.7. The move down came despite news that EU authorities were planning to publish the results of bank "stress tests" in a bid to calm sentiment around the euro. The losses were capped by the mining sector, which was mostly higher, with the Mexican silver producer Fresnillo, up 3.4 per cent or 35p at 1,060p, leading the way on the benchmark.

BP was 2.25p lower at 357.45p amid late reports that it was seeking up to $7bn in loans from seven banks. Earlier, the stock touched a session high of 379.5p, up 19.8p, on feeling that the company may have dealt with the worst of the political pressure in the US, with recent days seeing top bosses visiting the White House, agreeing to set up a Gulf of Mexico claims fund, suspending the dividend and testifying in front of lawmakers.

In the wider oil and gas sector, the services group Petrofac, though 12p lower at 1,242p as crude prices softened, was in focus after Deutsche Bank said it was among the least exposed to a slowdown in engineering and construction activity in the Gulf of Mexico. Wood Group, down 3.3p at 321.3p, screens as among the most exposed, according to the broker.

Elsewhere, the broker recommended Amec, which was 6p stronger at 851p, with Deutsche labelling it a "net beneficiary" of the implications of recent events on the energy sector. "Its heavy bias toward (high value) environmental and engineering consulting leaves it well positioned to benefit from renewed demand for improved safety practices and the ultimate reengineering of offshore projects," the broker said.

The banks were mixed, with Lloyds Banking Group retreating by 0.87p to 56.32p as traders banked profits from Thursday's gains, but Royal Bank of Scotland, up 0.3p at 47p, and Barclays, broadly unchanged at 312.35p, down 0.3p, fared better. HSBC was also broadly flat at 648.6p, down 0.3p, after Oriel Securities said it was a "logical dividend income replacement for BP", as it is both heavily weighted on the FTSE 100 and makes payouts every quarter.

The outsourcer Capita was among the losers, shedding 13.5p to 786p after UBS moved the stock to "sell". The broker also weighed in on sector peer Serco, which was 6.5p lower at 621.5p after UBS lowered it to "neutral". The broker said that while it fully expected outsourcing revenues to continue growing, the pace of growth may ease under pressure from factors such as waning contract wins, lengthy bid cycles and increasing competition.

"For both Capita and Serco, we see good growth and much good news priced in at current levels," UBS explained, noting that while current valuations look reasonable in terms of Serco's and Capita's historical ranges, "such multiples were achieved in a different growth environment and represent a full market premium".

Further afield, BBA Aviation was marked up by 5.7p to 195.8p after Citigroup, returning from a company presentation, reiterated its "buy" view. The broker said management had put on a "solid" show, confirming that the US aviation market, though still around 25 per cent off its peak, was continuing to make a gradual recovery.

Cape continued to strengthen, swelling by another 12.1 per cent or 27.5p to 255p as punters bought in on overnight confirmation of a "very preliminary" bid approach. The energy support services company didn't name the suitor, only saying that the approach may or may not lead to an offer, but speculators pegged their hopes on interest from a trade buyer. Private equity buyers were also mentioned, with the rumour mill anticipating a potential bid price in the range of 290p to 325p.

The Collins Stewart analyst Michael O'Brien said interest from an established energy services company such as Bilfinger Berger or from a construction business looking at increasing its energy exposure were the most likely possibilities. Private equity is also a possibility, as Cape has held talks with such groups in the past. "We believe Cape's footprint and reputation is highly attractive, particularly in the Middle East where relationship barriers to entry are very high," he said.

FTSE 100 Risers

Vodafone 143p (up 1.75p, 1.2 per cent)

Gains ground on the possibility of Verizon Wireless dividend payments from 2012.

Xstrata 1,027p (up 16.5p, 1.6 per cent)

Rises with other miners; Ambrian initiates coverage with a "buy" rating and target price of 1,430p.

Intercontinental Hotels 1,215p (up 9p, 0.8 per cent)

Continues to rise as traders highlight growing hopes of recovery.

FTSE 100 Fallers

British American Tobacco 2,177p (down 21p, 1 per cent)

Defensives out of favour as the market's appetite for risk holds up.

London Stock Exchange 635p (down 4.5p, 0.7 per cent)

Loses ground ahead of relegation to the mid-cap FTSE 250 index.

Shire 1,445p (down 7p, 0.5 per cent)

Like British American Tobacco, comes under pressure as investors keep clear of defensive plays.

FTSE 250 Risers

Lamprell 227.6p (up 19.1p, 9.2 per cent)

Rallies on news of $129m contract win; Bank of America-Merrill Lynch reiterates "buy" view.

Bluebay Asset Management 298.8p (up 13.8p, 4.8 per cent)

KBC Peel Hunt initiates coverage with a "buy" recommendation, 440p target price.

Ashmore 253.1p (up 9p, 3.7 per cent)

KBC Peel Hunt initiates coverage with a "buy" recommendation and target price of 305p.

FTSE 250 Fallers

Victrex 1,140p (down 35p, 3 per cent)

Falls back after analysts at Citigroup switch their stance from "buy" to "hold".

Tate & Lyle 494p (down 2.8p, 0.6 per cent)

UBS raises target price for the stock from 460p to 515p but maintains "neutral" rating.

Bodycote 203.9p (down 1p, 0.5 per cent)

Eases amid profit-taking as traders to move to secure the gains achieved on Thursday.

PROMOTED VIDEO
Arts and Entertainment
Sheeran arrives at the 56th annual Grammy Awards earlier this year
musicYes, that would be Ed Sheeran, according to the BBC
Arts and Entertainment
AKB48 perform during one of their daily concerts at Tokyo’s Akihabara theatre
musicJapan's AKB48 are one of the world’s most-successful pop acts
News
Ian Thorpe has thanked his supporters after the athlete said in an interview that he is gay
people
News
The headstone of jazz great Miles Davis at Woodlawn Cemetery in New York
news
Arts and Entertainment
Brendan O'Carroll has brought out his female alter-ego Agnes Brown for Mrs Brown's Boys D'Movie
filmComedy holds its place at top of the UK box office
News
newsBear sweltering in zoo that reaches temperatures of 40 degrees
Arts and Entertainment
Professor Kathy Willis will showcase plants from the Royal Botanic Gardens at Kew
radioPlants: From Roots to Riches has been two years in the making
News
ebookA unique anthology of reporting and analysis of a crucial period of history
Arts and Entertainment
TV The follow-up documentary that has got locals worried
Arts and Entertainment
Eminem's daughter Hailie has graduated from high school
music
Arts and Entertainment
Original Netflix series such as Orange Is The New Black are to benefit from a 'substantial' increase in investment
TVHoax announcement had caused outrage
Life and Style
Swimsuit, £245, by Agent Provocateur
fashion

Diving in at the deep end is no excuse for shirking the style stakes

News
One Direction star Harry Styles who says he has no plans to follow his pal Cara Delevingne down the catwalk.
peopleManagement confirms rumours singer is going it alone are false
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

Information Security Manager (ISO 27001, Accreditation, ITIL)

£70000 per annum: Harrington Starr: Information Security Manager (ISO 27001, A...

Biztalk - outstanding opportunity

£75000 - £85000 per annum + ex bens: Deerfoot IT Resources Limited: Biztalk Te...

Trade Desk Specialist (FIX, Linux, Windows, Network Security)

£60000 per annum: Harrington Starr: Trade Desk Specialist (FIX, Linux, Windows...

Service Desk Analyst (Windows, Active Directory, ITIL, Reuter)

£35000 per annum: Harrington Starr: Service Desk Analyst (Windows, Active Dire...

Day In a Page

Super Mario crushes the Messi dream as Germany win the 2014 World Cup in Brazil

Super Mario crushes the Messi dream

Germany win the 2014 World Cup in Brazil
Saharan remains may be evidence of the first race war, 13,000 years ago

The first race war, 13,000 years ago?

Saharan remains may be evidence of oldest large-scale armed conflict
Scientists find early warning system for Alzheimer’s

Scientists find early warning system for Alzheimer’s

Researchers hope eye tests can spot ‘biomarkers’ of the disease
Sex, controversy and schoolgirl schtick

Meet Japan's AKB48

Pop, sex and schoolgirl schtick make for controversial success
Iraq crisis: How Saudi Arabia helped Isis take over the north of the country

How Saudi Arabia helped Isis take over northern Iraq

A speech by an ex-MI6 boss hints at a plan going back over a decade. In some areas, being Shia is akin to being a Jew in Nazi Germany, says Patrick Cockburn
The evolution of Andy Serkis: First Gollum, then King Kong - now the actor is swinging through the trees in Dawn of the Planet of the Apes

The evolution of Andy Serkis

First Gollum, then King Kong - now the actor is swinging through the trees in Dawn of the Planet of the Apes
You thought 'Benefits Street' was controversial: Follow-up documentary 'Immigrant Street' has got locals worried

You thought 'Benefits Street' was controversial...

Follow-up documentary 'Immigrant Street' has got locals worried
Refugee children from Central America let down by Washington's high ideals

Refugee children let down by Washington's high ideals

Democrats and Republicans refuse to set aside their differences to cope with the influx of desperate Central Americas, says Rupert Cornwell
Children's books are too white, says Laureate

Children's books are too white, says Laureate

Malorie Blackman appeals for a better ethnic mix of authors and characters and the illustrator Quentin Blake comes to the rescue
Blackest is the new black: Scientists have developed a material so dark that you can't see it...

Blackest is the new black

Scientists have developed a material so dark that you can't see it...
Matthew Barzun: America's diplomatic dude

Matthew Barzun: America's diplomatic dude

The US Ambassador to London holds 'jeans and beer' gigs at his official residence – it's all part of the job, he tells Chris Green
Meet the Quantified Selfers: From heart rates to happiness, there is little this fast-growing, self-tracking community won't monitor

Meet the 'Quantified Selfers'

From heart rates to happiness, there is little this fast-growing, self-tracking community won't monitor
Madani Younis: Five-star reviews are just the opening act for British theatre's first non-white artistic director

Five-star reviews are just the opening act for British theatre's first non-white artistic director

Madani Younis wants the neighbourhood to follow his work as closely as his audiences do
Mrs Brown and her boys: are they having a laugh?

Mrs Brown and her boys: are they having a laugh?

When it comes to national stereotyping, the Irish – among others – know it can pay to play up to outsiders' expectations, says DJ Taylor