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
PROMOTED VIDEO
ebooks
ebooksA year of political gossip, levity and intrigue from the sharpest pen in Westminster
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

Selby Jennings: Oil Operations

Highly Competitive: Selby Jennings: Our client, a leading European Oil trading...

The Jenrick Group: Night Shift Operations Manager

£43500 per annum + pension + holidays: The Jenrick Group: Night Shift Operatio...

SThree: Trainee Recruitment Consultant - LONDON

£20000 - £25000 per annum + OTE £40,000 + Car + Pension: SThree: SThree are a ...

SThree: Trainee Recruitment Consultant

£20000 - £25000 per annum + OTE £35K: SThree: We consistently strive to be the...

Day In a Page

Isis in Iraq: Yazidi girls killing themselves to escape rape and imprisonment by militants

'Jilan killed herself in the bathroom. She cut her wrists and hanged herself'

Yazidi girls killing themselves to escape rape and imprisonment
Ed Balls interview: 'If I think about the deficit when I'm playing the piano, it all goes wrong'

Ed Balls interview

'If I think about the deficit when I'm playing the piano, it all goes wrong'
He's behind you, dude!

US stars in UK panto

From David Hasselhoff to Jerry Hall
Grace Dent's Christmas Quiz: What are you – a festive curmudgeon or top of the tree?

Grace Dent's Christmas Quiz

What are you – a festive curmudgeon or top of the tree?
Nasa planning to build cloud cities in airships above Venus

Nasa planning to build cloud cities in airships above Venus

Planet’s surface is inhospitable to humans but 30 miles above it is almost perfect
Surrounded by high-rise flats is a little house filled with Lebanon’s history - clocks, rifles, frogmen’s uniforms and colonial helmets

Clocks, rifles, swords, frogmen’s uniforms

Surrounded by high-rise flats is a little house filled with Lebanon’s history
Return to Gaza: Four months on, the wounds left by Israel's bombardment have not yet healed

Four months after the bombardment, Gaza’s wounds are yet to heal

Kim Sengupta is reunited with a man whose plight mirrors the suffering of the Palestinian people
Gastric surgery: Is it really the answer to the UK's obesity epidemic?

Is gastric surgery really the answer to the UK's obesity epidemic?

Critics argue that it’s crazy to operate on healthy people just to stop them eating
Homeless Veterans appeal: Christmas charity auction Part 2 - now LIVE

Homeless Veterans appeal: Christmas charity auction

Bid on original art, or trips of a lifetime to Africa or the 'Corrie' set, and help Homeless Veterans
Pantomime rings the changes to welcome autistic theatre-goers

Autism-friendly theatre

Pantomime leads the pack in quest to welcome all
The week Hollywood got scared and had to grow up a bit

The week Hollywood got scared and had to grow up a bit

Sony suffered a chorus of disapproval after it withdrew 'The Interview', but it's not too late for it to take a stand, says Joan Smith
From Widow Twankey to Mother Goose, how do the men who play panto dames get themselves ready for the performance of a lifetime?

Panto dames: before and after

From Widow Twankey to Mother Goose, how do the men who play panto dames get themselves ready for the performance of a lifetime?
Thirties murder mystery novel is surprise runaway Christmas hit

Thirties murder mystery novel is surprise runaway Christmas hit

Booksellers say readers are turning away from dark modern thrillers and back to the golden age of crime writing
Anne-Marie Huby: 'Charities deserve the best,' says founder of JustGiving

Anne-Marie Huby: 'Charities deserve the best'

Ten million of us have used the JustGiving website to donate to good causes. Its co-founder says that being dynamic is as important as being kind
The botanist who hunts for giant trees at Kew Gardens

The man who hunts giants

A Kew Gardens botanist has found 25 new large tree species - and he's sure there are more out there