Market Report: M&S up on talk Bolland's plan may make its Marc

 

It has been 15 months since Marc Bolland unveiled his three-year plan for Marks & Spencer and – judging by the market's reaction – investors have hardly been blown away. Since the boss of the high street institution, who had started the job just six months earlier, announced an ambitious, £900m investment program in November 2010, its share price has dropped more than 10 per cent.

Yet last night the retailer finished at its highest for seven months, powering up 6.7p to 360.1p, after UBS claimed evidence the strategy is working could be just around the corner.

Scribblers from the broker said that – as well as the tough economic situation facing shoppers – M&S's share price has been hurt by the lack of any explicit details regarding the plan, but that this should change with the release of its preliminary results in May.

Claiming "very little [is] incorporated in current consensus estimates for the three-year plan", they predicted that any signs the strategy may be working will see its share price "react very positively".

As well as raising their recommendation from "neutral" to "buy", the analysts also announced they were turning more positive on the sector as a whole, citing recent economic data plus the retailers' performance over Christmas.

B&Q-owner Kingfisher – which, along with M&S, was chosen as one of UBS's top picks – climbed 3.3p to 284.4p. The two were also highlighted for having a major opportunity online given the current disparity between their internet sales and overall market share.

Some of the high street names on the mid-tier index were also enjoying a strong session. Carpetright ticked up 7.5p to 680.5p as vague rumours its boss and founder, the Conservative peer Lord Harris of Peckham, could be considering trying to take the company private continued to do the rounds.

However, former Comet-owner Kesa Electricals was knocked back 0.95p to 75.3p, despite the news that Knight Vinke had yet again raised its holdings, with the activist shareholder's stake now standing at 21.3 per cent.

There was also some notable changes in the share register for Tesco (0.2p worse off at 318p) as it was revealed fund manager Blackrock's stake had dropped to 4.96 per cent, even though the supermarket share price has fallen more than a fifth since last month's profits warning,

It was a stark contrast to the recent decision by the "Sage of Omaha", Warren Buffett – whose Berkshire Hathaway investment vehicle is now Tesco's second-largest shareholder – to use the plummet as an opportunity to top up his holdings.

Overall, continuing fears regarding the effects of high oil prices and disappointment over the stance taken towards the eurozone debt crisis by G20 finance ministers over the weekend meant the FTSE 100 stayed below the 5,900 level for most of the session. However, promising US manufacturing data helped a late rally which limited the top-tier index's losses, and it finished 19.58 points worse off at 5,915.55.

While HSBC dipped 21.4p to 553.5p following its final results, it was Essar Energy which was standing out like a sore thumb after slumping 14.6 per cent to 107.6p. The miner – which looks set to be relegated in the next indices reshuffle – set a new, all-time low after its full-year earnings missed forecasts by $60m (£37.8m).

The decision to delay the trial over the Gulf of Mexico tragedy by a week, meant that BP advanced 5.5p to 501.7, with hopes growing the energy giant is close to reaching a settlement.

Among the oil groups on the FTSE 250, vague bid rumours continued to help Ophir Energy as the explorer shifted up 5.9p to 431.9p to set a new, all-time high.

The ongoing battle for Cove Energy has sparked hopes Ophir, which is also exploring in Africa, could be next for an approach, with RBC's Al Stanton saying it shows that "if a junior builds up a substantial resource base, big oil will take it out".

Cove itself edged back 0.25p to 234.75p on AIM, although it was still well ahead of the 220p a share that PTT offered last week to trump an earlier, 195p-a-pop approach from Shell (down 7p to 2,346p).

Although Goldman Sachs warned the recent rally in the oil explorers' share prices meant widespread M&A activity was now less likely, analysts from the broker also added that "compelling ... candidates exist". They named a number of names in the sector whom they said looked attractive, including the Falklands driller Rockhopper, which nonetheless slid back 4p to 389.5p.

Meanwhile, market gossips were also suggesting the mid-tier oil firm Exillon Energy as another potential target, citing Lukoil as a possible aggressor, although – with dealers playing down the vague speculation – it dropped 3.4p to 237p.

FTSE 100 Risers

l Bunzl 952p (up 21.5p, 2.31 per cent) Packaging firm takes the top spot on the benchmark index after beating forecasts by announcing an 11 per cent jump in its pre-tax profits for the year.

l International Airlines Group 162.9p (up 2.5p, 1.56 per cent) Having dipped more than 7 per cent over the last four sessions thanks to rising oil prices, British Airways-owner finally manages to bounce.

FTSE 100 Fallers

l Pearson 1,204p (down 47p, 3.76 per cent) Financial Times-publisher narrowly beats forecasts with its full-year results but is still knocked back as it warns trading in 2012 is likely to remain tough.

l International Power 449.3p (down 12.7p, 2.75 per cent) Power generator finishes in the red for the first time in four sessions despite vague rumours persisting that GDF Suez could try to take full control.

FTSE 250 Risers

l Perform 282p (up 12p, 4.44 per cent) Digital sports media company manages to set a new, all-time high after revealing it has struck a deal to increase its South American football rights.

l Cookson 685p (up 14.5p, 2.16 per cent) Industrial materials group is pushed up as it announces that its growing exposure to developing markets will help its sales grow during 2012.

FTSE 250 Fallers

l Afren 140.1p (down 5.9p, 4.04 per cent) Africa-focused oil group retreats as investors choose to bank profits after seeing its share price advance more than 70 per cent this year alone.

l Senior 195.4p (down 5.6p, 2.79 per cent) Aero engineer slips back despite revealing a 19 per cent jump in its full-year profits, with Peel Hunt blaming its recent rise for removing its "buy" advice.

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