Market Report: Hopes of move by Halliburton boosts Expro

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The Independent Online

The UK-based oil services firm Expro International was the focus of bid talk yesterday after early rumours suggested that the American oil services giant Halliburton was about to unveil an offer for the company.

Halliburton confirmed it was conducting due diligence on Expro in April. At the time, the American company said that if it made an offer, it would be in cash and at a premium to an earlier 1,435p offer from a Candover Partners-led consortium. Last night, traders cited speculation suggesting that Halliburton was ready to pitch its bid at up to 1,800p per share.

The talk, which suggested that the bid may come as early as this week, took Expro up by 10p to 1,540p.

The FTSE 100 recovered slightly yesterday, gaining 6.5p points to 6,198.1 as persistent strength in the price of crude boosted oil companies. The oil-inspired rally saved the London benchmark from falling yet again after the minutes from the last Bank of England interest rates meeting showed that the Monetary Policy Committee voted eight to one to keep the benchmark rate on hold at 5 per cent. The rally also offset the impact of early losses on Wall Street, where investors awaited the release of minutes from the last Federal Open Market Committee meeting.

The FTSE 250 was down 84.5 points at 10,165.8.

Among the oil companies, BG was up 72p at 1,394p, claiming first place on the leader board. Royal Dutch Shell gained 101p to 22,423p, Cairn Energy added 162p to 3,681p and BP was up 21.75p at 649.75p.

A number of ex-dividend stocks also dampened the FTSE 100's rally. Argos and Homebase-owner Home Retail Group lost 6.53 per cent or 16.25p to 232.75p; cruise operator Carnival was down 82p at 1,853p; supermarket chain J Sainsbury shed 15.5p to 340p; and consumer goods giant Unilever lost 48p to 1,635p after going ex-dividend.

Mining groups bounced back after Tuesday's sell-off. Anglo American was up 62p at 3,515p, BHP Billiton added 43p to 2,066p and Rio Tinto gained 48p to 6,641p.

Vedanta Resources was up 75p at 2,712p after UBS increased its target price for the stock to 3,100p from 2,600p. UBS also reiterated its "buy" stance on the stock, but added: "We believe the risks of a sector correction in the near- term are building."

The banks were down again as Roger Crossley, the widely followed technical analyst at NCB Stockbrokers, pointed out that the recent themes of strength in prospect in the resource-related stocks and weakness in prospect in financial and consumer confidence-related stocks "have never been more prevalent than now". The Royal Bank of Scotland lost 12.5p to 241.5p and claimed second place on the FTSE 100 loser board. HBOS was down 19.75p at 445.5p, Lloyds TSB lost 8p to 394.75p, Barclays was weaker by 7.5p at 398p and Alliance & Leicester was down 19.25p at 415.25p. HBSC, which went ex-dividend yesterday, was weaker by 12.25p at 863.75p.

BAE Systems gained 3.75p to 459.25p after Credit Suisse increased its 2008 and 2009 earnings-per-share forecasts. The broker said worries about the financial consequences of the American investigation into the Saudi bribery allegations were "overdone".

On the FTSE 250, Yell was down more than 15 per cent or 23.25p at 130.75p as analysts weighed in following the recent halving of the company's final dividend. Citigroup said the news was "hard to stomach" and in response reduced its target price for the stock to 333p from 360p. "We hadn't expected it and it removes a key valuation support," the broker said, adding: "That said, the dividend cut is not all bad news. It increases the financial flexibility of the group, which is what the market wanted."

UBS reiterated its "sell" stance, noting the lack of "positive catalysts". It added: "Revenue momentum at Yell could continue to weaken into [the second quarter] given deteriorating economic conditions."

Property investment and development group Segro was weak, losing 9.5p to 446p, after Goldman Sachs downgraded the stock to "sell" from "neutral". The broker, whose analysts also reduced their target price for the stock to 418p from 429p, said that it anticipated a "continuing deterioration in conditions in European real estate markets, particularly in the UK", the source of nearly three-quarters of Segro's rental income.

QinetiQ, the defence and security technology group, was firm after HSBC initiated coverage on the stock with an "over-weight" rating and 230p target price. The broker said the company was "well positioned in addressable US markets, which we estimate will support 10 per cent organic growth over the next three years". The stock advanced by 1p to 190.5p.

On AIM, Judges Capital was down 7p at 118p after placing 475,000 new shares at 110p each. It said the placing, which raised about £525,000 before expenses, was to enhance trading liquidity in its shares.