Market Report: Imperial rises as plain packaging fears subside

Imperial Tobacco was among the main blue-chip risers yesterday, as the cigarette manufacturer was given a vote of confidence over potential legislation that may force its products to be sold in a plain packet.

It was revealed last Tuesday that the Government will consider a ban on branding as a way of making smoking less attractive. If such a ban is introduced, the UK will follow Australia, where legislation against logos and colour on packets is expected to be implemented from 2012.

Calling it "the elephant in the room", Evolution Securities said it believed plain packaging "may become the hot topic in the sector in 2011". Yet its analysts were fairly relaxed about the effect on Imperial, whose products include Davidoff and Lambert & Butler.

The broker described Imperial as "well placed", partly because of its relatively low exposure to emerging markets – "where smoking is often aspirational". Evolution added that "existing committed smokers in mature markets ... are likely to continue to buy their preferred brands".

Although it is currently the Australian and UK markets where the measure is most likely to be brought in, Evolution said that "once a precedent has been set, other countries across the world typically follow suit". It therefore kept Imperial as a "buy", and the company closed the session 19p stronger on 1,893p.

Initial trading saw the FTSE 100 stay relatively steady until disappointing payroll data from the States caused stocks to plummet in the afternoon. However, a partial rally in the last few hours before the bell meant it finished just 22.24 points down on 5,745.32.

The miners were among the main risers, with Fresnillo topping the index as the gold and silver producer shot up 60p to 1,568p. Close behind it was Johnson Matthey, after the platinum processor advanced 59p to 1,926p as a result of Liberum Capital reiterating its advice to "buy".

Analysts from JP Morgan Cazenove were talking up the prospect of mergers and acquisitions in the European beverages sector, and the investment bank picked out SABMiller for a special mention. The broker said it could see a "a full combination with Castel/BGI in Africa" for the Grolsch-brewer, which "would be very attractive strategically". The suggestion did not exactly spark the imagination of investors, however, as the beer giant edged up 12p to 2,137.5p.

A note on UK asset managers from Numis signalled bad news for Man Group, which was downgraded to "reduce", causing the hedge fund manager to slide 9.6p to 279.1p. Still, the broker was relatively positive on the sector, saying that "for investors concerned about inflation, we believe the asset management sector provides an excellent inflation hedge".

Another faller was BAE Systems, despite the defence company claiming late on Thursday that there was a lot of interest in its Platforms Solutions business. It ended the session having dropped 4.6p to 326.2p, its price weakened by a key Pentagon official talking publicly about how defence expenditure in the States is likely to fall.



A positive update from Berkeley gave hope to its housebuilder peers on the FTSE 250; first-half pre-tax profits were up nearly 20 per cent to £61.6m, causing prices to jump 38p to 878p.

Arbuthnot's Kate Moy said the figures "are a reflection of the underlying resilience of the housing market in London and the South-east", adding that it was a good sign for both Bellway and Barratt Developments, which made 9.5p to 555.5p and 4.5p to 78p respectively. Taylor Wimpey was also going strong, as it added 1.03p to close on 26.4p.

Goldman Sachs initiated coverage on Imagination Technologies – whose technology can be found in Apple's iPhone – and placed the chip maker on its "conviction buy" list. The broker said that the company "offers prime exposure to some of the fastest growing technology end markets", as it put on 22.8p to 399.8p.

Premier Foods, which confirmed that it is close to selling its Quorn brand, was knocked back 0.43p to 18.13p. After reports earlier in the week that Nestlé was involved in discussions, Premier said yesterday that "advanced" talks over its meat-free unit were taking place with two interested parties, although it did not specify which they were.



Amid the small-caps, there was a massive rise for Lavendon, which moved 24p higher to 102.34p after announcing it had rejected an 111p-a-share offer from the Belgian company TVH. Meanwhile, a profit warning from Promethean World saw the interactive whiteboard-maker plummet 25.75p to 52p, a fall of over 30 per cent.

On the Alternative Investment Market, Dominion Petroleum enjoyed a big move towards the top as its share price was driven up 1.23p to 6.23p. Investors' interest in the company has been lifted this week after BG Group made a positive discovery in a well off Tanzania, raising hopes that Dominion, which operates in the same area, may reach a farm-out agreement.

Start your day with The Independent, sign up for daily news emails
ebooks
ebooksA celebration of British elections
  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

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

iJobs Job Widget
iJobs Money & Business

Ashdown Group: Editor-in-chief - Financial Services - City, London

£60000 - £70000 per annum + benefits : Ashdown Group: A highly successful, glo...

Ashdown Group: Junior Application Support Analyst - Fluent German Speaker

£25000 - £30000 per annum + benefits: Ashdown Group: A global leader operating...

Guru Careers: Management Accountant

£27 - 35k + Bonus + Benefits: Guru Careers: A Management Accountant is needed ...

Guru Careers: Project Manager / Business Analyst

£40-50k + Benefits.: Guru Careers: A Project Manager / Business Analyst is nee...

Day In a Page

General Election 2015: ‘We will not sit down with Nicola Sturgeon’, says Ed Balls

'We will not sit down with Nicola Sturgeon'

In an exclusive interview, Ed Balls says he won't negotiate his first Budget with SNP MPs - even if Labour need their votes to secure its passage
VE Day 70th anniversary: How ordinary Britons celebrated the end of war in Europe

How ordinary Britons celebrated VE Day

Our perception of VE Day usually involves crowds of giddy Britons casting off the shackles of war with gay abandon. The truth was more nuanced
They came in with William Caxton's printing press, but typefaces still matter in the digital age

Typefaces still matter in the digital age

A new typeface once took years to create, now thousands are available at the click of a drop-down menu. So why do most of us still rely on the old classics, asks Meg Carter?
Discovery of 'missing link' between the two main life-forms on Earth could explain evolution of animals, say scientists

'Missing link' between Earth's two life-forms found

New microbial species tells us something about our dark past, say scientists
The Pan Am Experience is a 'flight' back to the 1970s that never takes off - at least, not literally

Pan Am Experience: A 'flight' back to the 70s

Tim Walker checks in and checks out a four-hour journey with a difference
Humans aren't alone in indulging in politics - it's everywhere in the animal world

Humans aren't alone in indulging in politics

Voting, mutual back-scratching, coups and charismatic leaders - it's everywhere in the animal world
Crisp sales are in decline - but this tasty trivia might tempt back the turncoats

Crisp sales are in decline

As a nation we're filling up on popcorn and pitta chips and forsaking their potato-based predecessors
Ronald McDonald the muse? Why Banksy, Ron English and Keith Coventry are lovin' Maccy D's

Ronald McDonald the muse

A new wave of artists is taking inspiration from the fast food chain
13 best picnic blankets

13 best picnic blankets

Dine al fresco without the grass stains and damp bottoms with something from our pick of picnic rugs
Barcelona 3 Bayern Munich 0 player ratings: Lionel Messi scores twice - but does he score highest in our ratings?

Barcelona vs Bayern Munich player ratings

Lionel Messi scores twice - but does he score highest in our ratings?
Martin Guptill: Explosive New Zealand batsman who sets the range for Kiwis' big guns

Explosive batsman who sets the range for Kiwis' big guns

Martin Guptill has smashed early runs for Derbyshire and tells Richard Edwards to expect more from the 'freakish' Brendon McCullum and his buoyant team during their tour of England
General Election 2015: Ed Miliband's unlikely journey from hapless geek to heart-throb

Miliband's unlikely journey from hapless geek to heart-throb

He was meant to be Labour's biggest handicap - but has become almost an asset
General Election 2015: A guide to the smaller parties, from the the National Health Action Party to the Church of the Militant Elvis Party

On the margins

From Militant Elvis to Women's Equality: a guide to the underdogs standing in the election
Amr Darrag: Ex-Muslim Brotherhood minister in exile still believes Egypt's military regime can be replaced with 'moderate' Islamic rule

'This is the battle of young Egypt for the future of our country'

Ex-Muslim Brotherhood minister Amr Darrag still believes the opposition can rid Egypt of its military regime and replace it with 'moderate' Islamic rule, he tells Robert Fisk
Why patients must rely less on doctors: Improving our own health is the 'blockbuster drug of the century'

Why patients must rely less on doctors

Improving our own health is the 'blockbuster drug of the century'