Market Report: Kesa feels pressure to pull plug on Italian division

Could it be time for Kesa Electricals to bid arrivederci to Italy? Having recently managed to exit the UK by selling its struggling Comet chain for the nominal price of £2, yesterday the retailer was under pressure to get out of another European country.

It was UBS which was pushing the idea, as scribblers from the broker claimed that a closure of Kesa's loss-making Italian business should boost the company's earnings per share by a whopping 25 per cent.

The perilous situation in Europe could prompt Kesa to make such a move, they suggested, arguing that although "any further eurozone crisis will be unhelpful for short-term fundamentals it may act as the catalyst for a potential restructuring of the business".

At the same time, the analysts decided it was time to start snapping up Kesa's shares, changing their advice to "buy". The electricals group has fallen about a third since February, which, they pointed out, meant the stock was not much higher than the freehold value of 48p a share.

Saying this should "provide a fair degree of downside protection", they added that with "a market leading French brand, no liquidity issues and solid cash generation there is scope for both valuation and sentiment to recover." In response, Kesa pushed up 2.25p to 57.65p, although this is still less than half what it was trading at this time last year.

GDP figures may have shown the UK economy is in a double-dip recession, but that didn't stop the FTSE 100 creeping up 9.4 points to 5,718.89 ahead of last night's latest statement from the US Federal Reserve. This was despite a number of stocks trading ex-dividend, including the British Gas owner Centrica and the publisher Reed Elsevier, which slid 12.3p to 310.2p and 13.5p to 512.5p, respectively.

Arm Holdings powered above 557p in early trading, following fantastic figures from its major customer Apple late on Tuesday, with the US technology giant shrugging off Wall Street's concerns to reveal that its net profits in the first quarter had nearly doubled.

Chip designer Arm has been out of favour recently, having closed on Tuesday at an eight-month low after announcing first-quarter results. The fall prompted a number of analysts to pledge their support, including Numis Securities' Nick James, who said it was a "buying opportunity".

Nonetheless, Arm was unable to hold on to all of its gains, closing only 6p ahead at 537.5p, while fellow Apple supplier Imagination Technologies climbed 1p to 687.5p on the FTSE 250.

Vedanta Resources took the gold medal position, advancing 50p to 1,225p following full-year results from its Sterlite business. The miners were strong generally, with Bank of America Merrill Lynch claiming that the surplus capital of a number of the largest blue-chip diggers – including Rio Tinto (up 65p to 3,480p) and Anglo American (up 52p to 2,360p) – meantthey could return a large amount toshareholders.

With reports claiming that the German pharmaceuticals group Bayer is nearing a multi-billion euro acquisition, dealers' minds turned to Shire, which has often been suggested as a possible target. Nonetheless, the drugs maker still ended 10p weaker at 2,002p.

While Kenmare Resources said it could expand its Mozambique heavy sands mine, there was yet more takeover talk surrounding the Irish digger, which has been linked in speculation recently with a possible move from Rio Tinto.

The miner shifted up 2.15p to 51.9p on the FTSE 250 after market gossips suggested Brazil's Vale (which also operates in Mozambique) could be interested as well, although traders treated the vague rumours with a pinch of salt.

The news that Abu Dhabi's National Drilling Company has decided it wants another two rigs alongside four already being built pushed Lamprell higher, with the oil and gas services company ticking up 21p to 343.6p in response.

Premier Oil put on 10.1p to 378.4p after the driller's development plan for its Solan field in the North Sea was given the green light by the Department of Energy and Climate Change.

Meanwhile, fellow explorer Afren slumped 6.1 per cent to 134p as the Africa-focused company admitted its Nunya-1 exploration well off the coast of Ghana had found water.

Fairpoint was celebrating a windfall after the AIM-listed debt advice group revealed it had been refunded £9m in VAT by HMRC. In response, it charged up 7p to 71.5p, with the company also announcing an expansion of its credit facilities.

Elsewhere, Tracsis surged 14.6 per cent to 78.5p as the transport software maker revealed that its full-year profits should beat forecasts – the second time it has said so in little more than two months.

Suggested Topics
Wembley Stadium
footballNews follows deal with Germany
Arts and Entertainment
A spell in the sun: Emma Stone and Colin Firth star in ‘Magic in the Moonlight’
filmReview: Magic In The Moonlight
voicesApple continually kill off smaller app developers, and that's no good for anyone
A 'Sir Alex Feguson' tattoo

Arts and Entertainment
Ben Whishaw is replacing Colin Firth as the voice of Paddington Bear

Thriller is set in the secret world of British espionage

ebooksAn unforgettable anthology of contemporary reportage
Life and Style

ScienceGallery: Otherwise known as 'the best damn photos of space you'll see till 2015'
Life and Style

Bomber jacket worn by Mary Berry sells out within an hour

Life and Style
Andros Townsend is challenged by Vladimir Volkov
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

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

iJobs Job Widget
iJobs Money & Business

SQL Developer - Watford/NW London - £320 - £330 p/d - 6 months

£320 - £330 per day: Ashdown Group: The Ashdown Group have been engaged by a l...

Head of Audit

To £75,000 + Pension + Benefits + Bonus: Saxton Leigh: My client is looking f...

Audit Manager Central Functions

To £85,000 + banking benefits: Saxton Leigh: You will be expected to carry out...

Credit Risk Audit Manager

Up to £90,000 + benefits: Saxton Leigh: Credit Risk Audit Manager required to ...

Day In a Page

Mystery of the Ground Zero wedding photo

A shot in the dark

Mystery of the wedding photo from Ground Zero
His life, the universe and everything

His life, the universe and everything

New biography sheds light on comic genius of Douglas Adams
Save us from small screen superheroes

Save us from small screen superheroes

Shows like Agents of S.H.I.E.L.D are little more than marketing tools
Reach for the skies

Reach for the skies

From pools to football pitches, rooftop living is looking up
These are the 12 best hotel spas in the UK

12 best hotel spas in the UK

Some hotels go all out on facilities; others stand out for the sheer quality of treatments
These Iranian-controlled Shia militias used to specialise in killing American soldiers. Now they are fighting Isis, backed up by US airstrikes

Widespread fear of Isis is producing strange bedfellows

Iranian-controlled Shia militias that used to kill American soldiers are now fighting Isis, helped by US airstrikes
Topshop goes part Athena poster, part last spring Prada

Topshop goes part Athena poster, part last spring Prada

Shoppers don't come to Topshop for the unique
How to make a Lego masterpiece

How to make a Lego masterpiece

Toy breaks out of the nursery and heads for the gallery
Meet the ‘Endies’ – city dwellers who are too poor to have fun

Meet the ‘Endies’ – city dwellers who are too poor to have fun

Urbanites are cursed with an acronym pointing to Employed but No Disposable Income or Savings
Paisley’s decision to make peace with IRA enemies might remind the Arabs of Sadat

Ian Paisley’s decision to make peace with his IRA enemies

His Save Ulster from Sodomy campaign would surely have been supported by many a Sunni imam
'She was a singer, a superstar, an addict, but to me, her mother, she is simply Amy'

'She was a singer, a superstar, an addict, but to me, her mother, she is simply Amy'

Exclusive extract from Janis Winehouse's poignant new memoir
Is this the role to win Cumberbatch an Oscar?

Is this the role to win Cumberbatch an Oscar?

The Imitation Game, film review
England and Roy Hodgson take a joint step towards redemption in Basel

England and Hodgson take a joint step towards redemption

Welbeck double puts England on the road to Euro 2016
Relatives fight over Vivian Maier’s rare photos

Relatives fight over Vivian Maier’s rare photos

Pictures removed from public view as courts decide ownership
‘Fashion has to be fun. It’s a big business, not a cure for cancer’

‘Fashion has to be fun. It’s a big business, not a cure for cancer’

Donatella Versace at New York Fashion Week