Market Report: Royal Mail will be bought by a wide range of tracker funds
Wednesday 11 December 2013
It is not what business secretary Vince Cable will want to hear: When Royal Mail gets the official sign-off today to enter the FTSE 100, calls that it was sold off too cheaply will re-emerge.
Royal Mail listed in October and yesterday closed at 596.5p (down 0.5p) – up 80 per cent on its 330p float price. Once it officially enters the blue-chip index it will automatically be bought by a wide range of tracker funds – pushing its price up further.
Other newly listed groups – theme-parks owner Merlin Entertainments and estate agent Foxtons – will enter the mid-tier index. Merlin slipped 1p to 352p and Foxtons also declined 1p to 294p.
The wider market was back in the red as traders worried about the end of quantitative easing in the US. The FTSE 100 tumbled 36.17 to 6,523.31.
Vedanta Resources, due to be relegated to the FTSE 250, lost 17.5p to 804p.
Vague takeover rumours about engineer group Weir helped it up 60p to 2,132p.
Smiths Group added 21p to 1,399p as analysts at Morgan Stanley raised their rating of the engineer to overweight.
Broadcaster ITV sold its 6 per cent stake in Scottish TV group STV. STV slipped 9.5p to 297p and ITV dipped 1.4p to 182.2p.
Oxford Instruments' increased 525p a share bid to buy scientific digital camera maker Andor Technology has been recommended by the latter's board and the research tools specialist collected a 8p rise to 1,566p. Andor was 10p better at 515p.
Tech group CSR will take a $90m (£54.7m) hit to restructure its business due to "weakness in the digital still camera market". It will focus on the more-lucrative markets of designing chips for smartphones and other new business and it leapt to the top of the mid-cap index, adding 49.5p to 559.5p.
Egyptian gold miner Centamin glistened 0.51p brighter at 44.82p on news that it is attempting to diversify with a planned purchase of Burkina Faso and Côte d'Ivoire-focused explorer Ampella.
Aim-listed Seeing Machines, maker of technology to detect driver fatigue, drove up 0.125p to 7.25p after a deal to supply coach operator Royal Beuk with its automated Fatigue Monitoring Systems.
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