Market Report: Support from Putin fuels a gain for BP


Russia's president Vladimir Putin took time out from giving his soldiers a pep talk for a tête-à-tête with BP's Bob Dudley this week. The meeting, at which Mr Putin is said to have pledged his support, indicates that BP could eventually be given access to Russia's Arctic fields as part of a deal that will see it sell its 50 per cent stake in TNK-BP to the state-controlled energy giant Rosneft.

The long-expected deal is unlikey before Christmas but traders were noting yesterday that Rosneft, headed by Igor Sechin, a former deputy prime minister, is believed to have started talks with banks in London to secure up to $15bn finance to buy BP's stake. The talks show BP and Rosneft are coming closer to agreeing a deal that would allow BP to exit from its sometimes stormy TNK-BP joint venture with a quartet of oligarchs, and BP flowed up 4.8p to 443.75p.

Traders are also pinning their hopes on Qatar's sovereign wealth fund ploughing even more cash into London listed stocks. Yesterday, a spate of reworked rumours was doing the rounds about Qatar's riches, focusing on British utility groups.

Some dealers speculated that British Gas owner Centrica could be in the Gulf oil state's sights. The business is no stranger to takeover chat. For the past six years, rumours have come and gone that Russia's state-owned Gazprom has been circling. Centrica hissed up 1.8p to 335.5p.

Takeover talk refused to die for water group United Utilities and shares were up 19.5p to 727p. But some of the wiser City scribblers argued the move in utility company share prices could be impacted by government plans to change how the retail price index is measured. The Office for National Statistics is proposing changes to the way it calculates RPI — and utility charges are linked to RPI.

Last week's rumour that the Qataris were looking again at supermarkets chain Sainsbury's has disappeared for now, and the shares were stable at 0.1p to 341.3p. Brokers also had time to natter about software group Sage again. Bid talk has done the rounds for months, and yesterday whispers of a sale or restructuring of its US arm caused the shares to edge up 2.1p to 318.3p.

Banker-bashing has become obligatory, but could HSBC be a bank investors are allowed to love? Some City scribblers think as much. Analysts earlier this week lost patience with Royal Bank of Scotland and issued a sell rating, but today scribes at Barclays Capital have come out in favour of HSBC. They claim the "market currently underestimates HSBC's earnings and dividend trajectory".

Barclays' Rohith Chandra-Rajan retains his overweight – or buy – recommendation with a share price target of 700p and said HSBC's disposals and restructuring were "well on the way" to completion. He expects underlying earnings growth to accelerate from 4 per cent this year to 26 per cent next year.

Banks are under the cosh with new capital requirements coming in from Europe, but Mr Chandra-Rajan thinks HSBC, as a result of its strong capital position and its relatively limited European exposure, will "both be ahead of other UK banks and above the level proposed by the ICB." HSBC banked gains of 9.9p to 587.8p.

Bank of America Merrill Lynch analysts were also keen on banks yesterday, upgrading their share-price targets for a number of lenders. Barclays moved down 0.25p to 225.15p while RBS edged up 1.3p to 268.4p and Lloyds Banking Group rose 0.65p to 39.5p.

The FTSE 100 was up on news that Japan's central bank will make another round of monetary easing, but punters were lackadaisical and the index closed up only 20.32 points at 5888.48. After a strong run over the past month, shares in spread-betting company IG Group lost favour yesterday, falling 19.7p to 449.5p.

On the small-caps, persistent talk that bidders were eyeing Sportingbet was proved right when bookie William Hill said it is considering a joint offer for the Australian business with Sportingbet rival GVC Holdings. Sportingbet booked gains of 7.25p to 51p.

Octogenarian tycoon Jack Petchey's Trefick Limited has sold its entire 17.3 per cent stake in used car dealership Lookers. The shares were sold at 66p a share and small cap Lookers drove down 3p to 68.75p on the news.

Start your day with The Independent, sign up for daily news emails
  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Claims Administrator

£16000 - £18500 per annum: Recruitment Genius: This is an excellent opportunit...

Recruitment Genius: Senior SEO Executive

£24000 - £28000 per annum: Recruitment Genius: A Senior SEO Executive is requi...

Recruitment Genius: Online Customer Service Administrator

£16000 - £18000 per annum: Recruitment Genius: An Online customer Service Admi...

Recruitment Genius: Digital Marketing Executive

£18000 - £22000 per annum: Recruitment Genius: This global, industry leading, ...

Day In a Page

'It was first time I had ever tasted chocolate. I kept a piece, and when Amsterdam was liberated, I gave it to the first Allied soldier I saw'

Bread from heaven

Dutch survivors thank RAF for World War II drop that saved millions
Britain will be 'run for the wealthy and powerful' if Tories retain power - Labour

How 'the Axe' helped Labour

UK will be 'run for the wealthy and powerful' if Tories retain power
Rare and exclusive video shows the horrific price paid by activists for challenging the rule of jihadist extremists in Syria

The price to be paid for challenging the rule of extremists

A revolution now 'consuming its own children'
Welcome to the world of Megagames

Welcome to the world of Megagames

300 players take part in Watch the Skies! board game in London
'Nymphomaniac' actress reveals what it was really like to star in one of the most explicit films ever

Charlotte Gainsbourg on 'Nymphomaniac'

Starring in one of the most explicit films ever
Robert Fisk in Abu Dhabi: The Emirates' out-of-sight migrant workers helping to build the dream projects of its rulers

Robert Fisk in Abu Dhabi

The Emirates' out-of-sight migrant workers helping to build the dream projects of its rulers
Vince Cable interview: Charging fees for employment tribunals was 'a very bad move'

Vince Cable exclusive interview

Charging fees for employment tribunals was 'a very bad move'
Iwan Rheon interview: Game of Thrones star returns to his Welsh roots to record debut album

Iwan Rheon is returning to his Welsh roots

Rheon is best known for his role as the Bastard of Bolton. It's gruelling playing a sadistic torturer, he tells Craig McLean, but it hasn't stopped him recording an album of Welsh psychedelia
Russell Brand's interview with Ed Miliband has got everyone talking about The Trews

Everyone is talking about The Trews

Russell Brand's 'true news' videos attract millions of viewers. But today's 'Milibrand' interview introduced his resolutely amateurish style to a whole new crowd
Morne Hardenberg interview: Cameraman for BBC's upcoming show Shark on filming the ocean's most dangerous predator

It's time for my close-up

Meet the man who films great whites for a living
Increasing numbers of homeless people in America keep their mobile phones on the streets

Homeless people keep mobile phones

A homeless person with a smartphone is a common sight in the US. And that's creating a network where the 'hobo' community can share information - and fight stigma - like never before
'Queer saint' Peter Watson left his mark on British culture by bankrolling artworld giants

'Queer saint' who bankrolled artworld giants

British culture owes a huge debt to Peter Watson, says Michael Prodger
Pushkin Prizes: Unusual exchange programme aims to bring countries together through culture

Pushkin Prizes brings countries together

Ten Scottish schoolchildren and their Russian peers attended a creative writing workshop in the Highlands this week
14 best kids' hoodies

14 best kids' hoodies

Don't get caught out by that wind on the beach. Zip them up in a lightweight top to see them through summer to autumn
Robert Fisk in Abu Dhabi: The acceptable face of the Emirates

The acceptable face of the Emirates

Has Abu Dhabi found a way to blend petrodollars with principles, asks Robert Fisk