Market Report: Hacking cases spook Mirror investors
Friday 26 October 2012
When HMV’s Simon Fox revealed he was leaving the struggling music retailer for the Mirror owner, most thought he was jumping out of the frying pan and into the fire. The fire got that much hotter this week.
Mr Fox, as chief executive of Trinity Mirror, does not appear to have done enough to reassure investors following the revelation that hacking could have taken place at the Mirror.
Earlier this week a lawyer made a High Court claim on behalf of the former England football manager Sven-Göran Eriksson, a former nanny for the Beckham family, the footballer Garry Flitcroft and a Coronation Street actress.
The claims emerged on Tuesday, but investors were still spooked yesterday, and the shares booked in a near 16 per cent fall, losing 9.75p to 51.25p.
Shire investors are used to bumpy rides, and yesterday was yet another one. A forced seller sent the pharmaceutical giants shares hurtling down more than 4 per cent during morning trade. But the shares then began to recover and ended down just 0.57 per cent, losing 10p to 1,759p. Investors had to swallow a bitter pill on Thursday when its boss of five years, Angus Russell, said he will step down next April and it revealed it missed its third quarter forecasts.
But on Friday a prescription to buy the shares came from analysts at UBS who added the stock to their “conviction buy” list. Brokers at Jefferies also gave it a buy rating and a share price target of 2,400p.
The City is keeping a watchful eye on the hedge fund Man Group. The rumour is that it will be bought – but when and by who is still up for debate. Crispin Odey’s Odey Asset Management, has built up a 5.15 per cent stake and City sources reckon he plans to grow it to 10 per cent. But the chat is he will sit and wait for a bid to come in from a US hedge fund or bank. The US hedge fund billionaire Steve Cohen has also been rumoured by some but it is a waiting game and the shares were up 1.8p to 81.85p.
Another bid target oft quoted is publisher and events group Informa. Traders have been gossiping for weeks that a bid is due. It got an upgrade from scribes at Macquarie who now rate it outperform, up from neutral with a share price target of 450p. Rumours continued to focus on German publisher Axel Springer or a private equity group as possible bidders but its shares reversed 1.1p to 394p. Rival UBM has previously held talks with Informa, way back in 2008, and some City dealers think UBM is keeping a close eye on the situation. UBM ticked up 7p to 691p.
City traders reckon the haulage firm Eddie Stobart is on the road – the chat is it is planning to raise cash through a retail bond. Sources think Canaccord Genuity is working on it. Retail bonds have predominantly been the preserve of financial and property companies this year with Workspace Group, Primary Health Properties and CLS Holdings the most recent to issue them to raise cash. On Thursday Stobart said pre-tax profit dropped from £16.4m to £13.2m in the first half and yesterday its shares lost 2.7p to 113p.
The FTSE 100 was in negative territory during morning trade as eurozone concerns weighed heavy on investors’ minds but when Wall Street opened positive it edged back into the black. It ended up 1.66 points at 5806.71 but traders were expecting the benchmark index to fall next week as fears on the economic outlook refuse to go away.
The credit card insurer CPP said its performance next year would be hit by an FSA inquiry that is affecting new business but its full-year outlook remained unchanged and its shares bounced 2.96p to 11.75p.
Over on AIM, bid talk surrounded Toledo Mining Corporation. Filipino DMCI Mining Corporation has been building up a stake in the nickel focused miner. DMCI has been investing in Toledo to get an indirect stake in Berong Nickel Corporation. Toledo’s shares have jumped 9p this week but were static yesterday at 34.5p.
AIM tiddler Ascent Resources was forced to issue a statement on its negotiations over a farm out of its Slovenian asset. It said it is talking to Nafta Industrija Srbije, the Serbian oil and gas company controlled by Gazprom Neft, but “there can be no guarantee an agreement will be reached” and its shares edged up 0.28p to 1.58p.
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