Market Report: Sibir soars as it shelves property plans

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Investors in Sibir Energy heaved a sigh of relief yesterday, as the group decided against buying up real estate assets from its former director Chalva Tchigirinski. They became even giddier as one broker backed it to merge with one of its larger rivals.

The Russian group announced it was to unwind any agreements signed with its former director related to the $500m (£350m) deal announced in December. The news sent its shares soaring 40 per cent to 181p. Unicredit said the news was positive but flagged ongoing corporate governance concerns. It added that a merger with Gazprom, TNK-BP or Lukoil could save the company.

Another day and the miners were back in focus, dragging on the FTSE 100 as commodity prices softened. BHP Billiton lost the most as rumours did the rounds that the company's results would come in lower than forecast next week. The shares ended 7.5 per cent down at 1,181p. BHP has been in a relatively strong position relative to its peers, as it has nowhere near the crippling debts. It has still come off well over 40 per cent from its peak last year, though.

Rival miner Rio Tinto initially avoided the bloodshed across the sector as investors reacted positively to news it had started its non-core asset fire sale. Offloading its potash project to Vale for $1.6bn wasn't enough to avoid the slipstream, though, and it ended down 2.8 per cent at 1,506p.

The water utilities were not waving but drowning as Charles Stanley put out a downbeat note on the sector. The broker said there were few reasons to be bullish, and cut United Utilities to reduce from hold. It said: "We are more cautious on the sector and expect companies to trade closer to regulated asset value or below, until more visibility emerges with respect to the next regulatory period." The stock fell 2 per cent to 541p.

The market was flat early on, positive news after more than 2 per cent falls the previous day. But as commodity prices weakened and fears over a fall on Wall Street intensified, the top tier closed down 40.47 points at 4,149.64.

The banks did lend support, gaining ground after Thursday had brought three days of advances to an abrupt halt. Confidence was back and Barclays was the big winner, up 5.78 per cent to 106.1p.

It has been a tough week for the private equity house 3i Group, which announced a slump in the value of its assets and the departure of its chief executive Philip Yea. After two days of free-falling to a record low, it bounced 7.9 per cent to 226.5p. The group said its infrastructure arm was well placed to make new investments and shareholders were more confident after directors bought into the stock.

The takeover of New Star Asset Management by Henderson Group dominated the mid tier. Shareholders in the asset manger were bowled over by the terms of the £115m deal. It stormed up the second line to end the day at the summit, 20 per cent higher at 75p.

Also on the mid tier, the financial services group Close Brothers was up solidly in the wake of a trading update. While there were issues at various units, the interim results were "satisfactory", it said, and brokers backed the group's financial position. It finished the day up 16.8 per cent up at 496.25p. Bottom of the FTSE 250 was Aquarius Platinum, as metal prices fell investors locked in profits from the previous day's rises. It lost 20 per cent to 157.75p.

In the wider market, Chime Communications was ringing investors' bells with an update that said it would hit full-year expectations. The stock rose 23.2 per cent as a result to 46.50p. At the other end, the property group Wichford plunged 10.5 per cent to 38.5p despite confidence that it would weather the economic conditions. No happy snaps for Jessops, the camera retailer, either over fears that it could breach its banking covenants. It announced full-year losses of almost £50m and auditors raised concerns that if the conditions of the debt markets got worse, the future of the company could be in doubt. It lost 20.7 per cent to hit 2.18p.

On AIM, Albidon was looking anything but perfidious yesterday, as it rose 60 per cent to 6p. The sterling rises came as it announced a funding agreement with Pacific Road Resources Funds that could be worth up to $26m. The private fund specialises in mining project investments and the funding will be used for capital at its Munali nickel project.

The caravan and leisure group Discover Leisure was having a roaring time, motoring up the inside lane to close 85 per cent up on the day. The rise to 0.925p came from a well-received update, which showed market share growth and cost reduction.

US group Gen Probe agreed yesterday to buy Tepnel Life Sciences, which works in molecular diagnostics. The announcement of the £92.8m deal sent Tepnel up 28 per cent to 26.25p.

At the other end of the market was Capital Ideas. The penny stock plunged 38.5 per cent to 0.2p as it announced the intention to pull its listing from AIM. It said the costs associated were a "significant burden". The shares fell in spite of a 17.5 per cent boost in pre-tax profit.

The only presses being stopped in publishing group TMN were those of investors on the "buy" button. TMN said that full-year profits would be 50 per cent lower than expected, and introduced a round of cost cuts and staff reductions. It fell 42.6 per cent to 3.875p.