Market Report: Prudential catches a cold from its US exposure

The blue-chip index may have reached its highest point since June 2008 yesterday, but Prudential was left behind as analysts urged caution over its exposure to the US.

Downgrading its advice on the insurer to "reduce", Nomura said that although "conventional wisdom sees Prudential's main attraction as its Asian growth potential... we think the market is underestimating the recent growth in its US exposure".

That should worry investors, said the broker, which predicted Prudential will go "ex-growth" in the States this year thanks to increased competition "and the possibility that aggressive accounting has overstated profitability".

Nomura's analysts also said that its Asian unit "looks to be fully valued", and added that it preferred the insurer AIA for exposure to the region, which Prudential attempted to buy last year.

It was not all bad – the broker upped its estimates for the group's 2010 earnings – but Prudential still hit a low of 680p during trading before a slight rally meant it finished 1.5p weaker at 688.5p.

Overall the market was in a positive mood as the FTSE 100 surged up 70.73 points to 6,056.43 after three sessions of falling, with the banks helped by hopes that an agreement on a new eurozone rescue plan is getting close.

A number of blue-chip companies released figures yesterday, with Burberry the star of the show. The upmarket clothing retailer took pole position after rising 56p to 1,115p, following its third-quarter update in which it revealed forecast-beating revenue.

Investec's analysts were among the company's fans, saying that they "continue to believe the shares deserve a premium as they offer one of the few convincing global growth stories within our universe".

SABMiller jumped up 37p to 2,209p thanks to its interim management statement, as the brewer said it reported a 3 per cent increase in beer volumes in the third-quarter. There was a less positive reaction to Experian's latest figures, however, yet it was still 3.5p stronger at 779p as it announced a return to "positive growth across all regions and principal activities".

With the miners benefiting from strong metal prices, both Rio Tinto and African Barrick Gold (ABG) revealed latest production numbers. Rio climbed up 65.5p to 4,450p after its iron-ore output rose to a record level, but ABG shed 4p to 560p thanks to a failure to reach its 2010 production target.

Arm Holdings was bumped up 22p to 536.5p, meaning it has now gained more than 25 per cent already this year. Frequently the subject of takeover speculation, it announced a new deal with IBM late on Monday, while Goldman Sachs yesterday gave it a "buy" rating and a target price of 700p.

There was a modest shift up for Pearson of 5p to 1,006p following the news that it is upping its stake in the online education company TutorVista. The $127m (£80m) deal means that the publisher – which releases a trading update today – is now in control of the Indian group, increasing its exposure to the country's market.

The clear winner on the FTSE 250 was Taylor Wimpey as it leaped forwards 2.95p to 38.1p. The housebuilder said in a trading statement that its profit for 2010 would be ahead of expectations thanks to an improvement in the North American markets.

The group also confirmed it has received interest in its US unit Taylor Morrison, and although it said there was no guarantee of a sale, it reiterated its goal of refocusing "the business of the group on the UK market in the medium term".

A profit warning in IG's interim results left it with the mid-tier index's wooden spoon and a drop of 37.5p to 481p, with the spreadbetter blaming low trading activity last month for its caution over meeting expectations.

De La Rue climbed 41p to 829p as it continued to benefit from speculation this week that a new bid for the banknote printer could be just around the corner. The French group Oberthur Technologies has been given a deadline of 7 February to improve its 905p-a-share indicative offer, which was made and rejected in December.

One takeover definitely not happening is Ashtead's joint move for Lavendon, made with the Belgian group TVH Services. The small-cap company last week rejected a 115p-a-share approach from the duo, and Ashtead yesterday announced it was pulling out. As a result it gained 11.1p to 170.3p, while investors left Lavendon 12p weaker at 97.25p.

Down among the small-cap companies, there was vague speculation from market gossips that Southern Cross is about to receive an approach from a US group worth 45p-a-share, and the care home company stormed up 3.75p to 24p.

On the Alternative Investment Market, trading in Regal Petroleum's shares was suspended after it revealed it had received a new approach. The oil group's shareholders are currently considering a £77m offer from Energees Investments, but Regal announced that a joint proposal has been made by Heamoor and Geo-Alliance.

Start your day with The Independent, sign up for daily news emails
Life and Style
love + sex A new study has revealed the average size - but does that leave men outside the 'normal' range being thought of as 'abnormal'?
Arts and Entertainment
TV
Voices
The Palace of Westminster is falling down, according to John Bercow
voices..says Matthew Norman
Sport
Steve Bruce and Gus Poyet clash
football
News
Graham Norton said Irish broadcaster RTE’s decision to settle was ‘moronic’
TV
Arts and Entertainment
Jake and Dinos Chapman were motivated by revenge to make 'Bring me the Head of Franco Toselli! '
arts + ents Shapero Modern Gallery to show explicit Chapman Brothers film
Arts and Entertainment
Kurt Cobain performing for 'MTV Unplugged' in New York, shortly before his death
music Brett Morgen's 'Cobain: Montage of Heck' debunks many of the myths
ebooks
ebooksA special investigation by Andy McSmith
Life and Style
life
Sport
Brendan Rodgers
football The Liverpool manager will be the first option after Pep Guardiola
News
Amazon misled consumers about subscription fees, the ASA has ruled
news
Arts and Entertainment
Myanna Buring, Julian Rhind-Tutt and Russell Tovey in 'Banished'
TV Jimmy McGovern tackles 18th-century crime and punishment
Arts and Entertainment
Paul Whitehouse as Herbert
arts + ents
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Sales Executive - OTE £40,000

£15000 - £18000 per annum: Recruitment Genius: This is a great opportunity for...

Austen Lloyd: Law Costs HOD - Southampton

£50000 - £60000 per annum + Excellent Salary: Austen Lloyd: An outstanding new...

SThree: Recruitment Resourcer

£20000 - £21000 per annum + uncapped commission: SThree: As a graduate you are...

Ashdown Group: Junior Application Support Analyst - Fluent German Speaker

£25000 - £30000 per annum + benefits: Ashdown Group: A global leader operating...

Day In a Page

Syrian conflict is the world's first 'climate change war', say scientists, but it won't be the last one

Climate change key in Syrian conflict

And it will trigger more war in future
How I outwitted the Gestapo

How I outwitted the Gestapo

My life as a Jew in wartime Berlin
The nation's favourite animal revealed

The nation's favourite animal revealed

Women like cuddly creatures whilst men like creepy-crawlies
Is this the way to get young people to vote?

Getting young people to vote

From #VOTESELFISH to Bite the Ballot
Poldark star Heida Reed: 'I don't think a single bodice gets ripped'

Poldark star Heida Reed

'I don't think a single bodice gets ripped'
The difference between America and Israel? There isn’t one

The difference between America and Israel? There isn’t one

Netanyahu knows he can get away with anything in America, says Robert Fisk
Families clubbing together to build their own affordable accommodation

Do It Yourself approach to securing a new house

Community land trusts marking a new trend for taking the initiative away from developers
Head of WWF UK: We didn’t send Cameron to the Arctic to see green ideas freeze

David Nussbaum: We didn’t send Cameron to the Arctic to see green ideas freeze

The head of WWF UK remains sanguine despite the Government’s failure to live up to its pledges on the environment
Author Kazuo Ishiguro on being inspired by shoot-outs and samurai

Author Kazuo Ishiguro on being inspired by shoot-outs and samurai

Set in a mythologised 5th-century Britain, ‘The Buried Giant’ is a strange beast
With money, corruption and drugs, this monk fears Buddhism in Thailand is a ‘poisoned fruit’

Money, corruption and drugs

The monk who fears Buddhism in Thailand is a ‘poisoned fruit’
America's first slavery museum established at Django Unchained plantation - 150 years after slavery outlawed

150 years after it was outlawed...

... America's first slavery museum is established in Louisiana
Kelly Clarkson: How I snubbed Simon Cowell and become a Grammy-winning superstar

Kelly Clarkson: How I snubbed Simon Cowell and become a Grammy-winning superstar

The first 'American Idol' winner on how she manages to remain her own woman – Jane Austen fascination and all
Tony Oursler on exploring our uneasy relationship with technology with his new show

You won't believe your eyes

Tony Oursler's new show explores our uneasy relationship with technology. He's one of a growing number of artists with that preoccupation
Ian Herbert: Peter Moores must go. He should never have been brought back to fail again

Moores must go. He should never have been brought back to fail again

The England coach leaves players to find solutions - which makes you wonder where he adds value, says Ian Herbert
War with Isis: Fears that the looming battle for Mosul will unleash 'a million refugees'

The battle for Mosul will unleash 'a million refugees'

Aid agencies prepare for vast exodus following planned Iraqi offensive against the Isis-held city, reports Patrick Cockburn