Market Report: Sir Frank Chapman in the money but sell-off hits BG price


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The Independent Online

Pocketing £4.7m is not bad going by anyone's standards. That is how much Sir Frank Chapman has netted after the BG boss decided to cash in a chunk of shares, news of which left the blue-chip energy explorer among the worst fallers on the top-tier index yesterday.

The company was knocked back 59.5p to 1,224p following the revelation that its chief executive got rid of nearly 370,000 shares earlier in the week, selling them off at an average of 1,285p each. While by no means all of his stake – he still holds over 1.5 million shares – traders highlighted the lack of explanation for the sale, suggesting the reaction would have been better if the Square Mile had been given a reason.

Sir Frank, who is among the longest-serving Footsie bosses but plans to step down next year, will be wishing he had sold up a couple of months earlier. Back in March, before BG fell sharply along with the rest of the market, the stock reached 1,547p, meaning he could have earned himself nearly an extra £1m. Still, he may also point out that when he took the job back in 2000 the stock was less than a quarter of where it trades now.

BG was clearly in the mood for selling – it also announced it had struck a deal to get rid of its stake in two Philippines power plants for $360m (£231m). The group had agreed a sale of the business nearly two years ago which subsequently fell through.

It was not a good session for the oil companies in general as a sharp drop in the price of black gold weighed on the sector, with Tullow Oil dropping 49p to 1,427p and BP 8.55p lower at 398.3p.

It was the same story across the City as a torrent of bad news from the eurozone left the FTSE 100 93.86 points weaker at 5,297.28, while disappointing housing data from the States did not help. At the same time the heavyweight diggers were left deep in the red amid growing despondency over the likelihood of the Chinese government giving a major boost to the country's economy.

Another depressing factor was the fact a number of stocks were trading ex-dividend, including Marks & Spencer. The high street institution dipped 12.8p to 332.2p despite analysts from ING removing their "sell" advice, saying they welcomed the recent decision by M&S to cut back on its spending plans.

There were only six risers, with Severn Trent in the gold medal spot. The water utility – which has recently been boosted by takeover speculation – gushed up 42p to 1,706p after its full-year results beat the City's forecasts.

Arm Holdings edged 1p higher to 508.5p, with the chip designer helped by bullish comments late on Tuesday from customer Apple's boss Tim Cook on the tech giant's future plans.

Meanwhile, the decision by Dell to supply microservers using Arm's technology alongside those powered by chips from bitter rival Intel was being applauded by the Square Mile, with some suggesting this could result in extra annual sales of as much as $36m. At the same time, UBS's Gareth Jenkins was pointing out he believed further cash returns were likely from the chip designer.

Down on the FTSE 250, reports that a group of Indian ministers have recommended that coal blocks allocated to Essar Energy should get the green light saw the power giant spark up 25.5p to 141.8p. However, it was quick to say it believed the final decision would be taken by the Indian cabinet and that no official notification had been received yet.

Centamin was in demand. A revised development plan for its Sukari mine in Egypt saw the gold digger tick up 2.5p to 64.25p, with Bank of America Merrill Lynch reiterating its "buy" advice.

While Booker's deal to buy wholesaler Makro saw the cash and carry firm jump 7.9p to 87p, it was not the only purchase to receive a positive reaction.

On Aim, the environmental support services company Silverdell saw its shares lifted by 1p to 11.12p after saying that its £15m acquisition of EDS Group would be "transformational".

In the wake of talk that Maxim Barsky is rejoining TNK-BP as an adviser, having resigned as deputy chief executive of the Anglo-Russian group last year, dealers were highlighting vague speculation recently that it could be a step on the way to him taking the top job.

This, they suggested, may not be too promising for driller Matra Petroleum (0.12p worse off at 2.42p) of whom Mr Barsky recently became boss, although others have talked down the possibility of him getting the top job at TNK-BP.