Market Report: Dismal day marks the end of a terrible year in the City


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The Independent Online

The final trading day of the year on the stock market was almost as dismal as the 12 months which preceded it.

As it was a mere half day's trading, dealing volumes were pathetic and it was only the last-minute popping of champagne corks in the odd dealing room which meant the FTSE 100 actually closed up on the day. Only just. In fact a mere 5.51 points to the good at 5,572.28.

The Footsie has fallen by 5.55 per cent this year, but considering that in the dark days of August the index was off some 19 per cent, there is some reason to cheer. Indeed those who were actually around and had the guts to buy in those late days of summer and early autumn are sitting quite pretty now. For those who like such things or believe they matter this means £90.5bn was wiped off the value of "Britain's leading shares" this year. Ouch.

The smaller FTSE 250 ( which lacks the upward boost from international mining stocks which the FTSE 100 enjoys) fell far more heavily – down 12.6 per cent in 2011 to 10,102.9 points.

Thank the Lord, Britain never joined the euro though. If you thought London shares had fared badly spare a thought for Frankfurt which is down 14.7 per cent on the year, Paris down 17.8 per cent, Spain down 13.8 per cent and Milan a staggering 25.8 per cent. Non-euro countries gave a stronger performance: Switzerland was off only 7.8 per cent; on Wall Street the Dow was down just 6.1 per cent but the wider S&P 500 actually rose 0.4 per cent. Tokyo suffered its own domestic crises ranging from the tsunami to the near-collapse of camera-maker Olympus and fell 17.3 per cent to close at its lowest year-end level since 1982.

If oil rather than shares was your punt you've done nicely. Brent crude was trading a shade under $107 a barrel meaning it has risen 13 per cent this year. It has risen every year bar 2008 in the past decade.

So London has reasons to be cheerful.

Next – up 16p at 2753p – will kick off the first of the big retailers' Christmas and sales trading statements on Wednesday. Able once more to start its Boxing Day sale at the absurd hour of 6am, word on the street is that Lord Wolfson has pulled it off again. Unlike competitors he has managed to push through price rises and maintain profit margins.

Although the trading statement only covers the three months up to Christmas Eve, Next is clearly on course to have done much better than last year. Broker Seymour Pierce predicts that sales will be up by 4.1 per cent against last year's 3.3 per cent drop and Directory online and catalogue sales will be up by 9.3 per cent. Next shares have risen 37 per cent this year.

Hong Kong's Fortune Oil has teamed up with Chinese businessman Liu Minghui to reject a $2.2bn (£1.4bn) takeover bid for China Gas Holdings from the giant Sinopec. Fortune only holds a 2.1 per cent stake in China Gas but Mr Liu has an 8 per cent stake. They have formed a joint venture to give them the single largest stake in China Gas. Fortune's finance director today said: "We will not sell the stock." Fortune shares rose 0.9p to 13p at one point before settling 0.13p higher at 12.25p. It paid HK$3.10 (25.7p) a share for its China Gas stake; Sinopec's opening bid is HK$3.50 a share.

Security giant G4S boosted its presence in Botswana with two acquisitions including the country's third largest Trojan Security Services. The total cost is £2m and G4S shares rose 0.9p to 271.3p.

Bank shares took the wooden spoon for 2011 and barely added to the jollities yesterday. As veteran commentator David Buik of BGC Partners declared: "There is no doubt that the banking sector has taken the FTSE 100 below the Plimsoll line in 2011. In 2008 the banks dug their own graves. In 2011 the EU politicians buried them and added the daisies."

Barclays gained 1.55p to 176.05, Royal Bank of Scotland gasped to a 0.7p rise at 20.18p, Lloyds was up 0.43p to 25.91p and HSBC rose 0.95p to 491.05p. To put these in context – in the past year, Barclays has fallen 33 per cent, HSBC 21 per cent, RBS 49 per cent and Lloyds 61 per cent.

Racecourse owner Arena Leisure gained 0.5p to 37.8p after the Takeover Panel gave the Reuben brothers – who own rival Northern Racing – an extra week to compose their takeover bid. Arena is valued at around £137m but Sir Trevor Hemmings, who owns more than 100 racehorses, feels it is worth twice that. He holds a 40 per cent stake.

Promethean, the listed private equity vehicle chaired by Sir Peter Burt, rounded off a busy year with its annual meeting. Burt – formerly chief executive of Bank of Scotland – has already seen off moves to unseat him and is overseeing the realisation of the remaining quoted investments in the portfolio. Investors backed all resolutions but shares remained unmoved at 34.5p. Not too surprising given that most shareholders presumably had flocked to the meeting which was held yesterday at 9.30am on the Isle of Man.

FTSE 100 Risers

J Sainsbury 302.9p (up 6.9p)

Was Sainsbury's Christmas online food delivery glitch less damaging than feared? Or will 2012 be the year 25.9-per cent shareholder the Qatari Investment Authority finally bids?

ITV 68.2p (up 1.3p)

A two-day rise of more than 3 per cent after this newspaper reported that advertising over the holiday period might not have been as bad as feared in some quarters.

FTSE 100 Fallers

Man Group 125.7p (down 2.4p)

A miserable year in which the world's largest listed hedge fund manager has lost 58 per cent of its value. Outflows of funds appear to be slowing but maybe not fast enough.

Glencore 392p (down 6.5p)

Hard to remember this one floated at 530p as recently as May. Shares have been as low 347.5p. Doubts remain about the immediate outlook for commodities.

FTSE 250 Risers

Cable & Wireless Worldwide 16.25p (up 0.64p)

John Pluthero's last day in office as chief executive of the telecoms group is greeted by a 4 per cent price jump. Says it all.

Heritage Oil 192.5p (up 9p)

This international oil explorer with interests in Africa, the Middle East and Russia has been rising steadily since it lost the first round of its tax case against the Ugandan government last month.

FTSE 250 Fallers

Bumi 880p (down 38.5p)

The Indonesian coal minerformerly known as Vallar dippedas two iof its largest shareholders moved their share stakes around, damping any bid hopes.

Home Retail Group 83.4p(down 2.3p)

Looks like neitherArgos nor Homebase had a particularly strong Christmas. HRG shares are down 56 per cent on the year.