Market Report: Hope of European unit sale boosts DSG

DSG International was the main feature in the retail sector yesterday after rumours suggested a disposal may be in the offing.

Traders cited speculation that the owner of PC World was seeking to offload a European division in a bid to cut costs. DSG, the rumours suggested, had appointed Citigroup for advice on the sale.

The talk bore no clues about which division may be sold, but analysts said that Electro World, DSG's chain of electrical superstores across Hungary, the Czech Republic, Poland, Greece and Turkey, and UniEuro, its Italian business, were the most likely candidates for disposal.

If DSG puts Electro World on the auction block, analysts said, it may find a buyer in the German electrical retail group Media Markt, Kesa Electricals or possibly Best Buy, the American retailer which recently entered into a retail joint venture with the Carphone Warehouse. It will be harder to sell the underperforming UniEuro chain, they added.

The speculation was supplemented by the news that the non-executive director Andrew Lynch had picked up 20,000 shares in the company, which suggested that a significant transaction was not imminent.

By close, DSG was up more than 11 per cent, or 5.5p, at 55p. Carphone Warehouse was up 3.25p at 206p.

Overall, the FTSE 100 was up 11.7 points at 5,489.2 as the consumer stocks rallied thanks to renewed weakness in the price of oil.

British Airways, which also benefited from a positive Citigroup note, was the strongest, up 8.14 per cent, 20.75p, at 275.75p. Thomas Cook and TUI Travel, both of which are to publish updates next week, gained 17p each to 237.25p and 237.5p respectively.

The push in consumer stocks helped offset a bad day for the oil, gas and mining sectors, which tracked commodities prices. Kazakhmys claimed first place on the loser board, down 86p at 1,248p, while Ferrexpo, at second place, was down 15.75p at 260.25p. Among oil & gas companies, Tullow Oil lost 35p to 706p and Cairn Energy eased to 2,626p, down 102p.

British American Tobacco was down 38p at 1,838p after it said it was seeking a secondary listing in South Africa following plans by Richemont, the Swiss luxury goods maker, and Remgro, the South African investment group, to spin of their combined 27 per cent stake in BAT. About 90 per cent the share holding will be distributed to Remgro and Richemont share holders. The remaining 10 per cent of the combined holding (which equates to 3 per cent of BAT's issued share capital) will go to Reinet, a new Luxembourg investment vehicle.

Evolution Securities said that while in the short term the news will have some technical implications for the BAT share price and would encourage some investors to switch to Imperial Tobacco, it has "no fundamental investment implications".

Royal Bank of Scotland was up 7.5p at 240.5p after posting a lower-than-expected first-half loss of £691m – its first loss as a public company. Reacting to the news, Citigroup reiterated its "buy" advice. Pali International also stuck to its advice, maintaining a "neutral" rating on the stock. "Initial reaction is that these are better than expected, with a lower loss and higher core tier 1 capital," said the broker.

Banking was generally unsettled and HBOS was down 3.25p at 331.5p, while Barclays eased back to 366.5p, down 8.5p.

The FTSE 250 was up 113.2 points at 9,201.9 as consumer-related stocks rallied. The H Samuel-owner Signet was up 7.24 per cent, 4p, at 59.25p, while pubs group Punch Taverns advanced to 3,58.75p, stronger by 7.01 per cent or 23.5p.

Goldman Sachs moved M&S supplier Northern Foods, up 8.6 per cent at 60p, to "buy" from "neutral". The broker said that while the market will need to adjust to a lower level of profitability as the consumer continues to weaken and cost inflation recovery becomes harder, "the shares offer value to investors with a longer-term perspective".

Debenhams edged lower, down 6.19 per cent, or 3.5p, at 53p, as another broker poured scorn on the recent takeover rumours. "There isn't going to be a bid ... financial/debt worries haven't gone away and trading will worsen this autumn," said Pali International's analyst Nick Bubb, downgrading the stock to "sell" from "neutral".

Among smaller companies, New Star Asset Management was down 3.75p at 100.75p after Altium Securities moved the stock to "sell" following interim results from Schroders, the FTSE 100-listed asset manager which revealed a 27 per cent drop in pre-tax profits for the first half.

"We took the statement as negative as regards the outlook for retail funds and therefore the read across for New Star," said the broker, pointing out that New Star was the most indebted company among the asset mangers under its coverage.

Start your day with The Independent, sign up for daily news emails
Arts and Entertainment
Ben Stiller as Derek Zoolander in the leaked trailer for Zoolander 2
film
Sport
footballArsenal take the Community Shield thanks to a sensational strike from Alex Oxlade-Chamberlain
Arts and Entertainment
Gemma Chan as synth Anita in Humans
film
News
Keeping it friendly: Tom Cruise on ‘The Daily Show’ with Jon Stewart
people
Arts and Entertainment
Ensemble cast: Jamie McCartney with ‘The Great Wall of Vagina’
artBritish artist Jamie McCartney explains a work that is designed to put women's minds at rest
News
Republican Presidential Candidate Donald Trump
people
ebooks
ebooksAn introduction to the ground rules of British democracy
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
SPONSORED FEATURES
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: DBA Developer - SQL Server

£30000 - £35000 per annum: Recruitment Genius: This is an exciting opportunity...

Recruitment Genius: Customer Service Administrator

£13000 - £15000 per annum: Recruitment Genius: Are you passionate about custom...

Recruitment Genius: Dialler Administrator

£22000 - £25000 per annum: Recruitment Genius: Main purpose: Under the directi...

Ashdown Group: Contracts Manager - City of London

£35000 - £37000 per annum + benefits : Ashdown Group: Contracts Manager - City...

Day In a Page

Turkey-Kurdish conflict: Obama's deal with Ankara is a betrayal of Syrian Kurds and may not even weaken Isis

US betrayal of old ally brings limited reward

Since the accord, the Turks have only waged war on Kurds while no US bomber has used Incirlik airbase, says Patrick Cockburn
VIPs gather for opening of second Suez Canal - but doubts linger over security

'A gift from Egypt to the rest of the world'

VIPs gather for opening of second Suez Canal - but is it really needed?
Jeremy Corbyn dresses abysmally. That's a great thing because it's genuine

Jeremy Corbyn dresses abysmally. That's a great thing because it's genuine

Fashion editor, Alexander Fury, applauds a man who clearly has more important things on his mind
The male menopause and intimations of mortality

Aches, pains and an inkling of mortality

So the male menopause is real, they say, but what would the Victorians, 'old' at 30, think of that, asks DJ Taylor
Man Booker Prize 2015: Anna Smaill - How can I possibly be on the list with these writers I have idolised?

'How can I possibly be on the list with these writers I have idolised?'

Man Booker Prize nominee Anna Smaill on the rise of Kiwi lit
Bettany Hughes interview: The historian on how Socrates would have solved Greece's problems

Bettany Hughes interview

The historian on how Socrates would have solved Greece's problems
Art of the state: Pyongyang propaganda posters to be exhibited in China

Art of the state

Pyongyang propaganda posters to be exhibited in China
Mildreds and Vanilla Black have given vegetarian food a makeover in new cookbooks

Vegetarian food gets a makeover

Long-time vegetarian Holly Williams tries to recreate some of the inventive recipes in Mildreds and Vanilla Black's new cookbooks
The haunting of Shirley Jackson: Was the gothic author's life really as bleak as her fiction?

The haunting of Shirley Jackson

Was the gothic author's life really as bleak as her fiction?
Bill Granger recipes: Heading off on holiday? Try out our chef's seaside-inspired dishes...

Bill Granger's seaside-inspired recipes

These dishes are so easy to make, our chef is almost embarrassed to call them recipes
Ashes 2015: Tourists are limp, leaderless and distinctly UnAustralian

Tourists are limp, leaderless and distinctly UnAustralian

A woefully out-of-form Michael Clarke embodies his team's fragile Ashes campaign, says Michael Calvin
Blairites be warned, this could be the moment Labour turns into Syriza

Andrew Grice: Inside Westminster

Blairites be warned, this could be the moment Labour turns into Syriza
HMS Victory: The mystery of Britain's worst naval disaster is finally solved - 271 years later

The mystery of Britain's worst naval disaster is finally solved - 271 years later

Exclusive: David Keys reveals the research that finally explains why HMS Victory went down with the loss of 1,100 lives
Survivors of the Nagasaki atomic bomb attack: Japan must not abandon its post-war pacifism

'I saw people so injured you couldn't tell if they were dead or alive'

Nagasaki survivors on why Japan must not abandon its post-war pacifism
Jon Stewart: The voice of Democrats who felt Obama had failed to deliver on his 'Yes We Can' slogan, and the voter he tried hardest to keep onside

The voter Obama tried hardest to keep onside

Outgoing The Daily Show host, Jon Stewart, became the voice of Democrats who felt the President had failed to deliver on his ‘Yes We Can’ slogan. Tim Walker charts the ups and downs of their 10-year relationship on screen