Market Report: Expect the unexpected when it comes to Mike Ashley


Click to follow

Whether he’s downing pints on the terraces of St James’ Park or causing mayhem in the City, we’ve learnt to expect the unexpected when it comes to Mike Ashley.

With this in mind, it’s no wonder that analysts reacted positively to his decision to increase Sports Direct’s stake in Debenhams, buying a near 5 per cent holding on Thursday night for £33m, on top of a previous deal that could land him another 7 per cent.

“Investors have been averse to [Sports Direct’s] M&A activity in our view as it does not conform to the predictable pattern best-liked by retail-followers,” said analysts at Espirito Santo as its shares nudged up 15p to 610p.

“But we would point to the value created for shareholders over time by the aggregate of the group’s various strategies. If Sports Direct was not aggressive it would not now be on the point of becoming a major international force.”

The Newcastle United owner’s company was one of a number of risers on the Footsie, which closed up 81.52 points at 6,527.91 having fallen heavily on Thursday.

Garry White, the chief investment commentator at Charles Stanley, said: “After four consecutive days of losses, the market rallied – with positive US jobs data helping the positive tone. Tesco was once again falling [down 6.05p to 172.15p], as an unsubstantiated rumour of a rights issue circulated.”

He added: “That such a low-grade rumour can hit shares in the supermarket group to this extent shows the depth of investor concern about the sector.”

Away from the blue chips, the AIM-quoted investment house Miton Group found itself in trouble as one of its veterans headed out of the door. Bill Mott, famed for seeing through the hype of the dotcom boom, announced in July that he would retire at the end of the year, bringing his 34-year career in the City to an end. Yesterday Miton admitted that an unnamed “institutional client” had pull its cash in light of Mr Mott’s exit, accounting for £325.6m of assets under management.

Peel Hunt named the client as Scottish Widows Investment Partnership. Miton shares fell 3.12p to end at 32.5p.