Market Report: Monitise still a hot tip after shares sale

Even management selling a wedge of shares in mobile banking technology group Monitise yesterday wasn’t enough to put punters off the hotly tipped stock.

Alastair Lukies, the chief executive and co-founder of Monitise set it up in 2003 and after six years on Aim, he, alongside other directors, sold off 19.7 million shares. But the company said they “retain the majority of their equity interests as an ongoing incentive to continue to deliver further shareholder value” and part of the sale was to fund tax liabilities “directly arising from the option exercises”.

Monitise ticked up another 1.5p to 53p.

The group has had an amazing 2013 and is up nearly 60 per cent since the start of the year. Its results and news of its £39m purchase of mobile app developer Grapple on Thursday were well received. Goldman Sachs has issued two buy notes this week and said guidance of 50 per cent year-on-year growth is “conservative given the continuing strong news flow around new deal signings and partnerships”.

Goldman’s tech experts think the Aim group, which now has a market cap of £793m, will continue this outperformance and noted it still trades at a discount to US rivals which have a “similar growth and earnings profile”.

The week was a popular time for share sales by management of small Aim tech groups. A sale by video search engine Blinkx’s founder Suranga Chandratillake was confirmed yesterday. Mr Chandratillake sold 401,010 shares at 152p and still has 2,825,047. Earlier in the week Autonomy founder and tech guru Mike Lynch sold three million shares. Blinkx slipped 0.75p to 151.25p.

The wider market retained its positive gains from Thursday but it was a bumpy day as concerns about imminent military action in Syria and disappointing US jobs data worried traders.

The FTSE 100 advanced 14.89 to 6547.33.

Despite most of the City remaining cautious, it couldn’t contain its relief that Tullow Oil had actually done what it’s meant to and found some oil. The Africa-focused explorer shot up to the top of the Footsie as traders piled in on news of a Norwegian oil discovery.

The report came in the wake of a slew of recent disappointing updates when the business failed to find any commercial signs of oil or gas in wells off French Guiana and Mozambique.

Tullow has a 20 per cent interest in the licence in the Barents Sea, off Norway, and analyst Liberum Capital’s Andrew Whittock said: “This is a major frontier light oil discovery for Tullow Oil and proves a new shallow play in the region.”

But he also urged a bit of caution for excited punters and said: “There is no confirmation or any sign the discovery is commercial on a stand-alone basis. Good news but needs more appraisal.” However, it gushed 37p to 1,070p.

Drinks giant Diageo enjoyed a boost from analysts at Citigroup. They resumed coverage for the Smirnoff vodka-to-Guinness group, and rated it a buy and said it has “resilient growth” and “significant long-term opportunities in emerging markets”. It toasted a 5p rise to 1,982.5p.

SABMiller chairman Graham Mackay returned to work having recovered from surgery to remove a brain tumour in April. John Manser, the acting chairman during his absence, has gone back to being deputy chairman. Mr Mackay’s illness caused the brewer to speed up the handover from him to Alan Clark as the chief executive earlier this year. SAB was 42.5p healthier at 3,103p.

Over on the mid-tier table, investors in Bwin.Party Digital Entertainment were betting the launch of a new version of its poker website partypoker.com will be its saviour. It was hit last month when it revealed disappointing first-half figures but it was 2.5p better at 114.4p.

John Laing Infrastructure Fund announced plans for a £100m and £240m fundraising and £103m of purchases of three public-private partnership projects. But it took the wooden spoon on the mid-cap index, down 2.8p to 113p.

Buy

Imagination Technologies

Pick up shares in Imagination Technologies, Peel Hunt says. It thinks recent criticism of the designer of technology for mobile devices has been “off the mark”. The broker highlight deals to distribute the company’s speaker technology in two major US retail outlets as signs it is picking up speed. Peel gave the microchip maker a 630p price target for shares that are 293.5p.

Sell

BTG

Abandon shares in pharmaceutical company BTG, Numis suggests. Its prostate cancer treatment may be threatened by competing cancer drugs, according to Numis, and could threaten revenue. The analysts say “despite longer-term potential, near-term uncertainties mean we prefer a cautious position” for the group. They gave the shares, which are 376.8p, a 350p price target.

Hold

Vodafone

Hang on to your Vodafone shares, Jefferies’ broker Jerry Dellis advises. He says that due to the threat of acquisition and transactions risks, Vodafone “needs a 20-25 per cent upside to be compelling” as it is currently at around 12 per cent. But in the long term, £6bn of its Verizon joint-venture sale, earmarked for reinvestment in Vodafone, may help it edge ahead of competitors. Mr Dellis gave the shares, presently 210.75p, a 216p price target.