Forget sugar and tea. City experts claimed yesterday that investors in food group Associated British Foods are undervaluing its cheap clothing business Primark.
Twinings tea-to-sugar business ABF has a market capitalisation of around £21.2bn but experts at Morgan Stanley claimed Primark may have a market cap of about £30bn as a standalone business.
Its international expansion is in its infancy and there is plenty of growth potential. They raised their share price to 3,570p and said the group is undervalued. The City agreed yesterday and ABF was one of the top risers, up 76p to 2,762p.
Across the wider market, sentiment remained negative and traders continued to be nervous about emerging market problems and a potential US and Chinese economic slowdown. The FTSE 100 fell 16.39 points to 6,449.27.
But emerging markets fund manager Aberdeen Asset Management was the top riser, up 18.3p to 395p, amid signs that the panic about emerging markets was waning.
Smartphones microchips designer Arm Holdings was bottom of the pile after it warned of weaker royalty payments. It lost 55p to 875p.
J Sainsbury got the thumbs-up from analysts at Bernstein, who raised their rating to outperform and said despite its "five years of continuous market share increases" the grocer is still set to grow further. It ticked up 1.8p to 347.3p.
FTSE-250 polymer manufacturer Victrex reported sales volumes for the quarter to January rose 6 per cent and it produced a 183p rise to 1,947p.
Simon Lockett, the chief executive of Premier Oil, plans to step down from the board but will remain until a successor has been found. The shares spurted up 23p to 291.1p.
Materials engineer Low & Bonar also announced its chief executive Steve Good is to retire from his full-time executive role. The shares dipped 2.25p to 84.25p.
AIM-listed upmarket wallpaper and interiors firm Walker Greenbank said sales in the second half were strong and it produced a 4p rise to 169.5p.
Real Good Food group said margins were hit and it lost 2.25p to 63p.