Market Report: Man Group rise fails to halt relegation from top tier
Bye bye Man Group. The Footsie was saying its farewells to the hedge fund giant yesterday following the news that its time as a blue-chip index stock is about to come an end. Man may have been one of the few risers on a torrid day for the markets, but it was all too little, too late.
With the latest reshuffle of the indexes to be based on last night's closing prices, it is on course to move down to the FTSE 250. The changes will be confirmed next week, although this is likely to be justa formality.
It is the latest milestone in a dramatic fall from grace for Man, whose share price has plummeted more than 75 per cent since February 2011. Yesterday's climb of 2.6p to 75.5p was accompanied by the reheating of vague takeover speculation, prompting cynics to wonder whether it could be a final attempt to give it a boost ahead of the reshuffle. Bank of New York Mellon was once again being suggested as a possible bidder, with the familiar rumours mentioning a potential price of 100p a pop.
There has been talk recently it could be vulnerable, with the UBS analyst Arnaud Giblat claiming earlier in the year that investors would be happy to accept an approach worth 150p a share.
Dealers were not too impressed with the latest whispers, however, and some linked the move to optimism over its cost-cutting programme as well as the performance of its flagship AHL fund, whose woes have been blamed for Man's slump.
Its place on the benchmark index should be taken by Babcock International. The defence services group, which slipped 9.5p to 840.5p, has seen its share price add not far off 50 per cent since August with government penny-pinching giving it a boost.
Those set to drop out of the mid-tier index include SuperGroup (3.2p lower at 301p). A profits warning in April, partly blamed on getting its sums wrong, saw the retailer – which has been nicknamed SuperDroop by City wags – lose nearly 40 per cent in just one trading session.
Also among those moving lower should be the electronics chain Kesa (0.24p worse off at 48.76p) and oil rig manufacturer Lamprell (1.3p worse off at 99.5p), while Bank of Georgia is one of the companies becoming a mid-cap stock. The country's largest bank, which was steady at 1,025p, gained a premium listing in February.
May might have been the FTSE 100's worst month since February 2009, but June started with the top-tier index reaching a new six-month low by crashing down 60.67 points to 5,260.19. While manufacturing data was poor, the real sell-off came after US non-farm employment figures showed that just 69,000 jobs were added last month – well short of the 150,000 expected. Meanwhile, traders – who noted vague rumours claiming that co-ordinated monetary easing by the G20 may be imminent – were in a hurry to cut risk ahead of the extra long weekend.
If any more bad news was needed then there was also weak PMI data from China. With the country's appetite for upmarket goods a major driver behind the luxury sector, the upmarket brand Burberry – which recently announced Gabriella Wilde and Roo Panes as the faces of its new campaign – dipped 59p to 1,308p.
Fears over the television advertising market continued to hit ITV. The broadcaster was driven back 3.45p to 69.45p after Investec's Steve Liechti recommended selling, saying the uncertain macro environment was offsetting any boost from Euro 2012 and the Olympics.
With the price of gold jumping as investors searched for some security, the yellow metal digger Randgold Resources charged up 360p to 5,555p. Mid-tier peers Petropavlovsk and African Barrick Gold were lifted 21.1p to 388.1p and 19.9p to 349.4p.
Meanwhile the surprise announcement of plans to sell its stake in Anglo-Russian group TNK-BP saw BP advance 7.1p to 402p.
On the FTSE 250, Aquarius Platinum was knocked back 8.55p to 64.8p – a seven- year low – following suggestions earlier in the week from Goldman Sachs that the miner could call a halt to its dividend.
Bwin.Party ticked up 1.1p to 121.1p after revealing it had been granted an online gaming licence by Spain. William Hill (4.9p lower at 265.6p) and 888 (1.25p lower at 67.75p) were also among those getting the green light.
WANDisco was flying the flag for Yorkshire as it became the county's first London IPO since 2010. The software firm received a good reaction, moving up 19p to 199p on AIM from a float price of 180p.
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