Oil prices are shot but don’t assume it will last forever.
That was the advice of Liberum yesterday, which sparked a rally for Tullow Oil after reiterating its buy recommendation, albeit at a lower target price. Andrew Whittock at the broker thinks investors are being overly pessimistic, with the current price implying “$86 Brent forever and no future exploration success”.
Interest in Tullow was also stoked by Bernstein, which said the recent fall in shares for mid-level explorers means oil majors are likely to buy them rather than invest in discovering new reserves themselves. Tullow topped the FTSE 100, up 16.3p at 475p, while Bernstein’s note helped Cairn Energy 5.6p higher to 187.3p.
It was a different story for Salamander Energy, which has been trying to offload assets for much of the year. The Spanish giant Cepsa and Ophir Energy have been circling but Cepsa yesterday pulled out of the race, sending Salamander hurtling down 19.5p to 90p. Deal hopes now rest with Ophir, down 2.1p at 190p, which has until Monday to table a proposal.
The FTSE 100 was in fine fettle, rising 37.16 points to reach 6,709.13 after solid UK housing and inflation data. Rio Tinto dipped 54p to 3,004p as Chinese iron ore and steel futures tumbled to record lows, after data showing a further fall in Chinese house prices.
United Utilities climbed to a three-month high, up 16.5p at 903p, thanks to continued rumours of bid interest from a Canadian pension fund.
MCB Finance, which offers online loans in Eastern Europe, jumped 12p to 64.5p after revealing door-to-door lender International Personal Finance, 9.6p better at 483.1p, made an approach.
Business media and events group Informa raised £207m through a shares placing at 460p a share in an attempt to fund the acquisition of US trade show operator Hanley Wood Exhibitions, which focuses on real estate and construction. Informa dipped 34.9p to 469.6p.
The optimists continue to outnumber the pessimists on health monitoring device maker Fitbug. It was once again the biggest riser on AIM, adding 7.87p to close at 20p – up from 0.37p less than a month ago.Reuse content