Market Report: Man shares leap on BlackRock interest

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The Independent Online

As most of us already know, the hedgies (a cute term extended to, on the whole, a set of pretty ruthless financiers) have had their problems in recent years. Not only have they lost bucket loads of money by betting the wrong way on the financial debacle, they were also blamed for the crisis in some quarters, convincing regulators that it might be high time to clip their wings with heavy restrictions.

The spectre of tighter rules has not put off investors in the world's biggest listed hedge fund, Man Group, in recent days. And now the market thinks it knows why. BlackRock, the US investor, is thought to be lining up a bid for Man Group, and the news sent the shares to the top of the FTSE 100 yesterday.

The 11.8p increase to 239.6p was welcome news for investors, who have endured an abysmal recent performance. Before this week's gains, Man's shares had lost more than a third of their value in the past three months.

The improvement by Man reflected growing confidence on the wider market. The index of leading shares closed the day up for a third consecutive day, ending trading at 5,276.64, a 32.58 point gain.

"Onwards and upwards," said the experts at the spread betting group Capital Spreads. "Investors continue to shrug off the bad news and pick up equities, with banking stocks leading the way after another stellar round of results from leading European banks. For now it looks like the 5,000 level in the FTSE has well and truly held us up just when there were doubts starting to creep into investors' minds over the sustainability of the rally.

"Once again we've seen our price for the FTSE creep up throughout the night as Asian indices put in a good show and in particular Australian shares hit a three-week high. As a result, miners are also stronger bringing the riskier assets back into favour."

However, it was plumbing industry distributor Wolseley that vied with, and eventually lost out to, Man at the top of the FTSE 100. The group was clearly not comfortable answering calls about its 67p increase to 1445p, and declined to comment on the gains.

There was some real news about Eurasian Natural Resources Corporation, which was a strong performer, as it has had a habit of being in recent times. The 39.5p increase in the share price to 1006p came after Aim-listed African Minerals announced that its Tonkolili iron ore deposit in Sierra Leone is now estimated to contain 10.5 billion tonnes of the commodity.

This will interest backers of ENRC because Frank Timis, the colourful chief executive of African Minerals, said last year that ENRC was on the brink of buying the company. At the timem the Ukraine-based miner was annoyed by Mr Timis's comments, but there will have been quiet satisfaction in Kiev yesterday to be linked with the West African project even if, in fact, they are not linked at all.

There was a mixed bag of winners on the FTSE 100 leaderboard. Representing the taxpayer, Lloyds Banking Group put in another strong performance as the market licks its collective lips at what are expected to be impressive full-year results next week.

The 1.57p gain, putting the stock at 50.57p, came despite analysts at JP Morgan warning that the leading European banks will need an extra £221bn of capital if various regulators' proposed reforms are passed, combined with a £110bn drop in profits.

British Airways was in take-off mode again yesterday, after staff at the German flag carrier and rival Lufthansa said they were set to walk out on strike on Monday over pay and job security. BA's shares jumped 7.2p to 206.8p.

At the other end of the table, there was no spark for Scottish and Southern Energy, which brought up the rear. The utility company's stock, which has trading in a narrow band for most of the year, slipped 34p to 1149p.

The drinks can-maker Rexam was also firmly planted in the relegation zone after publishing its full-year results for 2009 yesterday. The group had said that profits for the year were in line with expectations, which was good. But the company also warned that "visibility" for 2010 remained low, which was bad.

The stock closed the day 5p lower at 277p. The slip continued the recent downward momentum, which has the shares in negative territory for the past 12 months.

BP was also a laggard, falling 15.6p to 572.6p after the Russian government moved to strip TNK-BP, its joint venture in Russia, of its Kovykta gas field in eastern Siberia.

The best performer on the FTSE 250 was the IT services outfit Computacenter, which leaped by 10.15 per cent, or 28.1p, to 305p. Despite an impressive charge of nearly 110 per cent in the past year, the stock has tracked down over the past month. The company's directors own about 50 per cent of the stock, making the volumes of nearly 130,000 shares changing hands all the more intriguing. Why the spike? "Dunno," said the company.

After a strong day on Tuesday, helped by an upbeat trading statement, the infrastructure investment group Ecofin dropped by 5.1p to 135.9p yesterday, with a number of punters no doubt taking their profits following Tuesday's gains.