Market Report: Scottish independence hopes fire Babcock higher

 

When Scotland goes to the polls, don't be surprised to see Babcock International cheering on Alex Salmond. If the leader of the Scottish National Party gets his way and breaks up the union, then – according to City scribblers – the defence group could be one of the beneficiaries.

North of the border, Babcock runs the Faslane base, which is home to the Trident submarines, for the Royal Navy while its Rosyth dockyard is currently building the Queen Elizabeth aircraft carriers.

As a result, said Canaccord Genuity's Michael Donnelly, a possible shake-up of the armed forces' presence in Scotland if it gains independence "could provide an opportunity" for the company. Notably, one of Mr Salmond's major aims is to remove Trident from Scottish waters, and the analyst noted the potential for Babcock from such a decision given "the complexity and time involved in potentially re-locating nuclear and submarine facilities".

Mr Donnelly was bullish on the group generally, keeping his "buy" rating and raising its target price to 900p. After a meeting with its top brass, he said they remained "strongly positive" on its core UK defence engineering services market, and investors responded by pushing Babcock up 13p to 753.5p.

Overall, the FTSE 100 edged 12.36 points higher to 5,927.91 after a mixed run of economic news from the States, with poor durable goods data cancelled out by encouraging consumer confidence figures.

Investors were largely happy to keep their hands in their pockets ahead of today's second-round of cheap loans from the European Central Bank, although the prospect did give metal prices a push. Subsequently the miners were rising, with Antofagasta climbing 24p to 1,364p while Vedanta Resources was bumped 25p higher to 1,502p.

Top of the pile was Essar Energy, with the oil group moving off an all-time low to finish 5.8p stronger at 113.4p. It made the move despite Goldman Sachs downgrading its rating to "neutral" following Monday's disappointing full-year results, while the bounce prompted the revival of vague speculation that its majority shareholders may be interested in taking it back private, although the idea was widely ridiculed when it emerged last month.

Grolsch-owner SABMiller managed to stay steady at 2,574.5p despite Nomura taking the fizz out of its takeover hopes. The brewer has been linked recently with a possible move from Budweiser giant Anheuser-Busch InBev, but the broker's analysts said they were "sceptical" over the prospect, claiming it was not "clear that new management could run SABMiller better".

Down on the FTSE 250, Laird enjoyed a late rally to close 6.6p better off at 175.7p after Cooper Industries said it would continue to look for acquisitions. Last year the US electricals group made a failed 185p approach for the maker of electro-magnetic shielding devices for laptops, although City voices said they were not convinced Cooper would now be prepared to increase its bid.

The clear winner on the mid-tier index was Persimmon, which shot up 88p – or 14 per cent – to 715p after the housebuilder revealed it managed a forecast-beating 55 per cent jump in underlying profits last year, while it also announced shareholders were in for a windfall return of £1.9bn.

The results gave a boost to its peers, with Taylor Wimpey and Barratt Developments lifted 2.98p to 52.65p and 7.8p to 149.2p respectively.

Dixons was given a push by Panmure Gordon's analysts, who played down fears the electronics retailer would not be able to pay its 2012 bonds. They reiterated their "buy" rating, and the chain ticked up 0.43p to 14.93p in response.

The battle for Cove Energy took another twist after India's ONGC and GAIL revealed they might make a joint offer for the oil explorer following reports from the country claiming the two were mulling over whether to make an approach worth 245p.

This would be much higher than the previous 220p and 195p-a-share offers Cove has received from Thailand's PTT and Shell (up 2.5p to 2,348.5p) respectively, and the group pushed up 5.75p to 240.5p on AIM as a result.

However, its fellow Africa-focused oil group Bowleven was not so lucky. Vague rumours in early trading that Dragon Oil (18p stronger at 599p) could be about to announce an offer proved wide of the mark, with it instead revealing it was not going to make a bid. As a result Bowleven slumped 24.02 per cent to 102p.

Andes Energia soared up 40.09 per cent to 77.75p after the energy group said it was splitting into two. It also announced successful exploration results from Argentina, with some in the Square Mile especially bullish over the amount of oil it is believed to have found.

Start your day with The Independent, sign up for daily news emails
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

Recruitment Genius: Compliance Manager

£40000 - £60000 per annum: Recruitment Genius: A Compliance Manager is require...

SThree: Talent Acquisition Consultant

£22500 - £27000 per annum + OTE £45K: SThree: Since our inception in 1986, STh...

Recruitment Genius: Experienced Financial Advisers and Paraplanners

Negotiable: Recruitment Genius: This extremely successful and well-established...

Guru Careers: FX Trader / Risk Manager

Competitive with monthly bonus: Guru Careers: We are seeking an experienced FX...

Day In a Page

How to stop an asteroid hitting Earth: Would people co-operate to face down a global peril?

How to stop an asteroid hitting Earth

Would people cooperate to face a global peril?
Just one day to find €1.6bn: Greece edges nearer euro exit

One day to find €1.6bn

Greece is edging inexorably towards an exit from the euro
New 'Iron Man' augmented reality technology could help surgeons and firefighters, say scientists

'Iron Man' augmented reality technology could become reality

Holographic projections would provide extra information on objects in a person's visual field in real time
Sugary drinks 'are killing 184,000 adults around the world every year'

Sugary drinks are killing 184,000 adults around the world every year

The drinks that should be eliminated from people's diets
Pride of Place: Historians map out untold LGBT histories of locations throughout UK

Historians map out untold LGBT histories

Public are being asked to help improve the map
Lionel, Patti, Burt and The Who rock Glasto

Lionel, Patti, Burt and The Who rock Glasto

This was the year of 24-carat Golden Oldies
Paris Fashion Week

Paris Fashion Week

Thom Browne's scarecrows offer a rare beacon in commercial offerings
A year of the caliphate:

Isis, a year of the caliphate

Who can defeat the so-called 'Islamic State' – and how?
Marks and Spencer: Can a new team of designers put the spark back into the high-street brand?

Marks and Spencer

Can a new team of designers put the spark back into the high-street brand?
'We haven't invaded France': Italy's Prime Minister 'reclaims' Europe's highest peak

'We haven't invaded France'

Italy's Prime Minister 'reclaims' Europe's highest peak
Isis in Kobani: Why we ignore the worst of the massacres

Why do we ignore the worst of the massacres?

The West’s determination not to offend its Sunni allies helps Isis and puts us all at risk, says Patrick Cockburn
7/7 bombings 10 years on: Four emergency workers who saved lives recall the shocking day that 52 people were killed

Remembering 7/7 ten years on

Four emergency workers recall their memories of that day – and reveal how it's affected them ever since
Humans: Are the scientists developing robots in danger of replicating the hit Channel 4 drama?

They’re here to help

We want robots to do our drudge work, and to look enough like us for comfort. But are the scientists developing artificial intelligence in danger of replicating the TV drama Humans?
Time to lay these myths about the Deep South to rest

Time to lay these myths about the Deep South to rest

'Heritage' is a loaded word in the Dixie, but the Charleston killings show how dangerous it is to cling to a deadly past, says Rupert Cornwell
What exactly does 'one' mean? Court of Appeal passes judgement on thorny mathematical issue

What exactly does 'one' mean?

Court of Appeal passes judgement on thorny mathematical issue