Market Report: Sage eases up despite fears of difficult year

While the Footsie closed deep in the red last night, Sage was kept afloat on hopes that the business software group will avoid the woes of its peers. The consensus in the City may be that the sector is facing a difficult year ahead as firms cut spending on IT, but Sage was picked out yesterday by Bank of America Merrill Lynch as one of the names still worth buying.

The group eased up 1.7p to 294.75p as Chandramouli Srirama, an analyst at the heavyweight broker, upgraded his advice to "buy" despite being generally downbeat on the European software and IT services companies.

In particular, Mr Srirama praised Sage as a defensive haven for punters, claiming it will outperform its rivals because roughly two-thirds of its revenues come from subscriptions.

He also pointed out that its shareholders are in line for a treat, calculating that the group's dividend plans meant they are set to receive a total of roughly £650meither through Sage buying back shares or issuing extraordinary dividends.

The analyst was much less keen on Logica, and as a result the troubled IT firm was driven back 4.35p to 65.95p on the mid-tier index. Following on from its profit warning last month – the company's third of 2011 – Mr Srirama removed his "buy" recommendation and slashed his target price by nearly a third to 75p.

Sage and Logica were not the only technology stocks in focus, as Arm Holdings climbed 15.5p to 610p. Dealers were putting the move down in part to Apple's recent announcement that the iPhone 4S – which uses Arm's technology – is about to go on sale in China, while the Cambridge-based group was also given a helping hand by UBS's decision earlier in the week to add it to the broker's "most preferred" list of stocks.

Overall the FTSE 100 continued to decline, slipping 44.19 points to 5,624.26, despite jobs data from the States beating expectations. However, it was Europe and not the US that the Square Mile focused on, with yet more concerns over France's triple-AAA credit rating as the country's latest debt auction saw yields rise.

The eurozone banks – surprise, surprise – were causing more than a few raised heartbeats in the City. While Italy's Unicredit continued to fall after its rights issue on Wednesday was priced at a major discount, Deutsche Bank became the latest to find itself hit by by capital-raising fears.

Vague rumours spread across the City in early trading suggesting that Germany's largest bank could be about to launch its own rights issue, although Deutsche Bank declined to comment while reports denied the speculation.

Nonetheless, as Lloyds dropped 0.25p to 26.35p while Royal Bank of Scotland was knocked back 0.49p to 20.27p, there seems little chance of the issue going away with Guardian Stockbrokers' Atif Latif warning that "many of the EU banks will have to raise capital over the coming months".

While the miners generally suffered from a lack of risk appetite among investors, Eurasian Natural Resources ended up as the benchmark index's top performer. The digger surged up 30.5p to 695p after agreeing a deal to end its dispute with Canada's First Quantum Minerals over a project in the Democratic Republic of Congo.

Takeover rumours continued to swirl around Afren as the oil explorer jumped up 6p to 105.4p. With vague bid speculation doing the rounds for a while now, one wild tale yesterday suggested EnQuest (up 3p to 101.3p) as a possible suitor, although – given it is smaller than Afren and focused on a different part of the world – the idea was widely rubbished.

Traders instead speculated that if an offer did emerge it would come from a much bigger oil company. However, others argued that Afren was in fact still being pushed up by its stellar production update issued earlier in the week.

Elsewhere in the sector, Ophir Energy – which many believe will be a star performer in 2012 – claimed the FTSE 250's gold medal after powering forwards 20.3p to 318.8p.

Meanwhile, its fellow Africa-focused explorer Cove Energy ticked up 10.89 per cent to 124.75p on AIM after announcing it is open to takeover offers.

Gulf Keystone Petroleum was once again attracting some optimistic buying as the Kurdistan explorer – a favourite of the punters and the frequent subject of bid talk – advanced 11p to 01p.

Games Workshop was in storming form after the Warhammer game manufacturer revealed there was still plenty of demand for its model orcs. The group announced a 43 per cent jump in its first-half net income, while also unveiling a 29p dividend, all of which helped it to shift up 40p to 490p.

PROMOTED VIDEO
Sport
Wembley Stadium
footballNews follows deal with Germany
Arts and Entertainment
A spell in the sun: Emma Stone and Colin Firth star in ‘Magic in the Moonlight’
filmReview: Magic In The Moonlight
Voices
voicesApple continually kill off smaller app developers, and that's no good for anyone
Sport
A 'Sir Alex Feguson' tattoo
football

Arts and Entertainment
Ben Whishaw is replacing Colin Firth as the voice of Paddington Bear
tv

Thriller is set in the secret world of British espionage

News
ebooksAn unforgettable anthology of contemporary reportage
Life and Style
life

News
ScienceGallery: Otherwise known as 'the best damn photos of space you'll see till 2015'
Life and Style
fashion

Bomber jacket worn by Mary Berry sells out within an hour

Life and Style
tech
Sport
Andros Townsend is challenged by Vladimir Volkov
football
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

SQL Developer - Watford/NW London - £320 - £330 p/d - 6 months

£320 - £330 per day: Ashdown Group: The Ashdown Group have been engaged by a l...

Head of Audit

To £75,000 + Pension + Benefits + Bonus: Saxton Leigh: My client is looking f...

Audit Manager Central Functions

To £85,000 + banking benefits: Saxton Leigh: You will be expected to carry out...

Credit Risk Audit Manager

Up to £90,000 + benefits: Saxton Leigh: Credit Risk Audit Manager required to ...

Day In a Page

Mystery of the Ground Zero wedding photo

A shot in the dark

Mystery of the wedding photo from Ground Zero
His life, the universe and everything

His life, the universe and everything

New biography sheds light on comic genius of Douglas Adams
Save us from small screen superheroes

Save us from small screen superheroes

Shows like Agents of S.H.I.E.L.D are little more than marketing tools
Reach for the skies

Reach for the skies

From pools to football pitches, rooftop living is looking up
These are the 12 best hotel spas in the UK

12 best hotel spas in the UK

Some hotels go all out on facilities; others stand out for the sheer quality of treatments
These Iranian-controlled Shia militias used to specialise in killing American soldiers. Now they are fighting Isis, backed up by US airstrikes

Widespread fear of Isis is producing strange bedfellows

Iranian-controlled Shia militias that used to kill American soldiers are now fighting Isis, helped by US airstrikes
Topshop goes part Athena poster, part last spring Prada

Topshop goes part Athena poster, part last spring Prada

Shoppers don't come to Topshop for the unique
How to make a Lego masterpiece

How to make a Lego masterpiece

Toy breaks out of the nursery and heads for the gallery
Meet the ‘Endies’ – city dwellers who are too poor to have fun

Meet the ‘Endies’ – city dwellers who are too poor to have fun

Urbanites are cursed with an acronym pointing to Employed but No Disposable Income or Savings
Paisley’s decision to make peace with IRA enemies might remind the Arabs of Sadat

Ian Paisley’s decision to make peace with his IRA enemies

His Save Ulster from Sodomy campaign would surely have been supported by many a Sunni imam
'She was a singer, a superstar, an addict, but to me, her mother, she is simply Amy'

'She was a singer, a superstar, an addict, but to me, her mother, she is simply Amy'

Exclusive extract from Janis Winehouse's poignant new memoir
Is this the role to win Cumberbatch an Oscar?

Is this the role to win Cumberbatch an Oscar?

The Imitation Game, film review
England and Roy Hodgson take a joint step towards redemption in Basel

England and Hodgson take a joint step towards redemption

Welbeck double puts England on the road to Euro 2016
Relatives fight over Vivian Maier’s rare photos

Relatives fight over Vivian Maier’s rare photos

Pictures removed from public view as courts decide ownership
‘Fashion has to be fun. It’s a big business, not a cure for cancer’

‘Fashion has to be fun. It’s a big business, not a cure for cancer’

Donatella Versace at New York Fashion Week