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
ebookA unique anthology of reporting and analysis of a crucial period of history
Life and Style
techPatent specifies 'anthropomorphic device' to control media devices
The PM proposed 'commonsense restrictions' on migrant benefits
voicesAndrew Grice: Prime Minister can talk 'one nation Conservatism' but putting it into action will be tougher
Ireland will not find out whether gay couples have won the right to marry until Saturday afternoon
Kim Jong-un's brother Kim Jong-chol
Manchester city skyline as seen from Oldham above the streets of terraced houses in North West England on 7 April 2015.
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

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

iJobs Job Widget
iJobs Money & Business

Guru Careers: Software Developer / C# Developer

£40-50K: Guru Careers: We are seeking an experienced Software / C# Developer w...

Neil Pavier: Management Accountant

£45,000 - £55,000: Neil Pavier: Are you looking for your next opportunity for ...

Sheridan Maine: Commercial Accountant

£45,000 - £55,000: Sheridan Maine: Are you a newly qualified ACA/ACCA/ACMA qua...

Laura Norton: Project Accountant

£50,000 - £60,000: Laura Norton: Are you looking for an opportunity within a w...

Day In a Page

Sun, sex and an anthropological study: One British academic's summer of hell in Magaluf

Sun, sex and an anthropological study

One academic’s summer of hell in Magaluf
From Shakespeare to Rising Damp... to Vicious

Frances de la Tour's 50-year triumph

'Rising Damp' brought De la Tour such recognition that she could be forgiven if she'd never been able to move on. But at 70, she continues to flourish - and to beguile
'That Whitsun, I was late getting away...'

Ian McMillan on the Whitsun Weddings

This weekend is Whitsun, and while the festival may no longer resonate, Larkin's best-loved poem, lives on - along with the train journey at the heart of it
Kathryn Williams explores the works and influences of Sylvia Plath in a new light

Songs from the bell jar

Kathryn Williams explores the works and influences of Sylvia Plath
How one man's day in high heels showed him that Cannes must change its 'no flats' policy

One man's day in high heels

...showed him that Cannes must change its 'flats' policy
Is a quiet crusade to reform executive pay bearing fruit?

Is a quiet crusade to reform executive pay bearing fruit?

Dominic Rossi of Fidelity says his pressure on business to control rewards is working. But why aren’t other fund managers helping?
The King David Hotel gives precious work to Palestinians - unless peace talks are on

King David Hotel: Palestinians not included

The King David is special to Jerusalem. Nick Kochan checked in and discovered it has some special arrangements, too
More people moving from Australia to New Zealand than in the other direction for first time in 24 years

End of the Aussie brain drain

More people moving from Australia to New Zealand than in the other direction for first time in 24 years
Meditation is touted as a cure for mental instability but can it actually be bad for you?

Can meditation be bad for you?

Researching a mass murder, Dr Miguel Farias discovered that, far from bringing inner peace, meditation can leave devotees in pieces
Eurovision 2015: Australians will be cheering on their first-ever entrant this Saturday

Australia's first-ever Eurovision entrant

Australia, a nation of kitsch-worshippers, has always loved the Eurovision Song Contest. Maggie Alderson says it'll fit in fine
Letterman's final Late Show: Laughter, but no tears, as David takes his bow after 33 years

Laughter, but no tears, as Letterman takes his bow after 33 years

Veteran talkshow host steps down to plaudits from four presidents
Ivor Novello Awards 2015: Hozier wins with anti-Catholic song 'Take Me To Church' as John Whittingdale leads praise for Black Sabbath

Hozier's 'blasphemous' song takes Novello award

Singer joins Ed Sheeran and Clean Bandit in celebration of the best in British and Irish music
Tequila gold rush: The spirit has gone from a cheap shot to a multi-billion pound product

Join the tequila gold rush

The spirit has gone from a cheap shot to a multi-billion pound product
12 best statement wallpapers

12 best statement wallpapers

Make an impact and transform a room with a conversation-starting pattern
Paul Scholes column: Does David De Gea really want to leave Manchester United to fight it out for the No 1 spot at Real Madrid?

Paul Scholes column

Does David De Gea really want to leave Manchester United to fight it out for the No 1 spot at Real Madrid?