Market Report: Resolution revived with deals on hold

 

Putting a lid on deal doing for a while has helped Clive Cowdery's insurance group to the top of the blue-chip index. His formerly acquisition-hungry Resolution couldn't appear to sate its appetite and investors weren't that happy. But last year it decided to change strategy and return cash to investors rather than make more acquisitions.

City scribblers think it is now undervalued and it is time to buy. Investors followed suit and the insurance group jumped 15.4p to 236.6p.

Analysts at Bank of America Merrill Lynch said its "shares are down 10 per cent year to date against a sub-sector up nearly 30 per cent. The valuation case is now compelling across a range of measures… shares are trading at a 20 per cent discount to peers." Bank of America's researcher Blair Stewart said: "We now have greater confidence in the company's ability to meet our dividend forecasts. And this is the most obvious reason to own the shares."

The insurance sector was in focus for City traders too. Gossip mongers touted round a reheated rumour that European insurance groups were taking a look at Legal & General. The rumours surfaced in 2010 when dealers thought Zurich Financial could be eyeing it. This time vague whispers of Zurich but also German group Allianz Group, which updates the market with its third-quarter results on Friday, were doing the rounds.

The hazy bid chatter accompanied a share price rise of 3.9p to 144.2p for Legal & General.

Silicon Fen has raided Silicon Valley for a cupboardful of microchip copyrights. The Cambridge-based smartphone microchip supplier ARM Holdings is leading the Bridge Crossing tech consortium in the $350m (£220m) purchase of a patent portfolio from Nasdaq-listed and California-based Mips Technologies.

Down the road in Kings Langley, Hertfordshire, graphics and video specialist Imagination Technologies has snapped up the rest of Mips for $60m, buying up 160 engineers and 82 of Mips' patents. It will also get a licence for the 498 patents which ARM's consortium has bought. Imagination, which has Apple and Intel as shareholders, has waded in to the deal to make sure it is still a contender in the microchip patent business and it doesn't want to lose out to ARM. But analyst James Goodman at sInvestec isn't yet convinced on the Imagination deal.

He reduced his share target price to 498p and moved his rating to hold and said: "We see increased strategic risk as Imagination attempts to achieve what Mips could not, whilst also continuing to defend its leadership in graphics technology. With another layer of risk to the investment case… We expect ARM to remain dominant in its core markets."

Mips (formerly Microprocessor without Interlocked Pipeline Stages), was put up for sale earlier this year. Imagination's shares booked in a 9.3p rise to 474.3p. ARM's deal was better received by analysts. It is contributing almost half the deal price, $167.5m, and its shares rose 14.5p to 709.5p.

Retailers were the focus of the week with Marks & Spencer and Primark-owner ABF reporting yesterday and Morrisons supermarket later this week. Marks & Spencer gained 10.8p to 398.7p as chief executive Marc Bolland asked the City to give him more time to implement change and ABF, boosted mainly by its Primark retail division, dropped 1p to 1,365p.

The City's main focus has been on the outcome of the US election. Investors took heart from reasonably healthy corporate results and the FTSE 100 index moved up 45.84 points to 5884.9.

On AIM, Bowleven, the Africa-focused oil and gas company, has agreed a deal with blue-chip oil services group Petrofac. Petrofac will work with Bowleven on the development of the Etinde Permit, offshore Cameroon. Analysts think the deal will ease any funding concerns for Bowleven for now. It spurted up 5.75p to 80.5p and Petrofac lost 4p to 1,566p.

Fellow AIM player Irish-focused Europa Oil & Gas, gave an update on its Mullen prospect in the Irish Atlantic Margin. It is seeking a joint venture partner for the prospects to get them to a "drillable status". The shares advanced 1.12p to 9.38p.

Start your day with The Independent, sign up for daily news emails
ebooks
ebooksA special investigation by Andy McSmith
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

Ashdown Group: Junior Application Support Analyst - Fluent German Speaker

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

Recruitment Genius: Customer Service Advisor

£15000 - £16000 per annum: Recruitment Genius: A Customer Service Advisor is r...

Ashdown Group: Trainee Consultant - Surrey / South West London

£22000 per annum + pension,bonus,career progression: Ashdown Group: An establi...

SThree: HR Benefits Manager

£40000 - £50000 per annum + pro rata: SThree: SThree Group have been well esta...

Day In a Page

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
Yvette Cooper: We can't lose the election. There's too much on the line

Yvette Cooper: We can't lose the election. There's too much on the line

The shadow Home Secretary on fighting radical Islam, protecting children, and why anyone in Labour who's thinking beyond May must 'sort themselves out'
A bad week for the Greens: Leader Natalie Bennett's 'car crash' radio interview is followed by Brighton council's failure to set a budget due to infighting

It's not easy being Green

After a bad week in which its leader had a public meltdown and its only city council couldn't agree on a budget vote, what next for the alternative party? It's over to Caroline Lucas to find out
Gorillas nearly missed: BBC producers didn't want to broadcast Sir David Attenborough's famed Rwandan encounter

Gorillas nearly missed

BBC producers didn't want to broadcast Sir David Attenborough's famed Rwandan encounter
Downton Abbey effect sees impoverished Italian nobles inspired to open their doors to paying guests for up to €650 a night

The Downton Abbey effect

Impoverished Italian nobles are opening their doors to paying guests, inspired by the TV drama
China's wild panda numbers have increased by 17% since 2003, new census reveals

China's wild panda numbers on the up

New census reveals 17% since 2003