Market Report: Tullett Prebon gains ground on deal hopes

Tullett Prebon firmed as the prospect of deal activity lured the bulls last night. The stock rose 15p to 290p after Citigroup said that, faced with a rapid shift towards electronic trading, the inter dealer may revisit takeover talks with GFI in an attempt to strengthen its position in that market, and take on Icap, which was up 6.5p at 415.9p yesterday. Coupled with the undemanding valuation, this prospect could provide a floor for the share price, which has been hit by concerns about the outlook.

"The industrial logic of linking up these two groups to form a more effective rival to [the] market leader, Icap, is strong. In addition, GFI has strong electronic capability in specific products such as energy and CDS. A larger group could fund greater technology spend to build a rival offering to [Icap's Brokertec/EBS platforms]," Citi said. "A failure to reach agreement on price and managerial position may have caused these approaches to fail in the past, and could well scupper any future discussions, but the possibility of [mergers and acquisitions activity] might also provide a floor to the Tullett share price slide."

Overall, the FTSE 100 jumped by almost 2 per cent or 97.18 points to 5293.99, while the FTSE 250 strengthened by 1.1 per cent or 100.76 points to 9099.84. Volumes thinned, with traders winding down ahead of Christmas. "It would be premature to bank any profits in equities now ahead of the year end, when the uptrend is still firmly in place," Angus Campbell, head of sales at Capital Spreads, said. "There are still a lot of people long on equities and their view is that prices will continue to rally in 2010, so there's no point in selling now. There may also be a bit of optimism about growth driving us higher too as [today's] final GDP numbers are expected to be revised upwards and could possibly ... show that the UK wasn't in recession in the third quarter of 2009."

Hopes of progress in the Dubai World debt talks boosted the banking sector, with Barclays rallying 8.75p to 273p, HSBC gaining 22.5p to 702.5p and Standard Chartered advancing to 1543p, up 48.5p. Lloyds edged up 0.545p to 49.245p, while Royal Bank of Scotland was broadly unchanged at 29.81p, down 0.02p.

Though still concerned about the potential impact of the Basel committee's regulatory reform proposals, investors were said to be piling in on the view that last week's concerns about another wave of capital raisings may have been overdone, particularly in light of the fact that the final policy was still some way off.

The point was touched upon by Deutsche Bank, which weighed in on the issue yesterday. "These are discussion documents, not the final product," the broker said in a 17-page circular on the proposals. "Impact studies conducted with the banks will lead to refinements and redrafts to make the policy more effective in achieving the overall objectives of greater bank sector stability."

Elsewhere, the mining sector bounced as the dollar stabilised, opening up some breathing space for metals prices. As a result, Xstrata jumped by 34.5p to 1053p, while Lonmin ended 44p stronger at 1839p. Rio Tinto gained 71p to 3203p, BHP Billiton was at 1909p, up 26p, while Anglo American rose 56p to 2650p.

In the oil and gas space, Cairn Energy rose 142p to 3188p after announcing that it had secured a rig to allow it to commence drilling in the Disko West area, off Greenland, in the second half of next year. In response, analysts at the Royal Bank of Scotland reiterated their "buy" stance, saying that Cairn had "delivered an early Christmas present to shareholders" by bringing its offshore Greenland drilling programme forward to 2010, compared with previous guidance of 2011.

"Cairn has been one of the better UK [exploration and production] performers in recent months, which we believe is partly down to growing optimism around the Greenland exploration story," the broker said, adding that the next step for the company was clarity on the size of individual prospects. "We will revisit our 3440p target price after clarity on prospect sizes, but we expect the market to react positively to the news."

Further afield, the wireless chip manufacturer CSR, down 4.2p at 391.7p, was weak despite some words of support from Bank of America Merrill Lynch, which added the stock to its most preferred list of European tech stocks, saying that concerns about the integration of Bluetooth with baseband chips in handsets, and about the last of upgrades to guidance for the fourth quarter, had been overdone.

In other changes, Merrill moved the FTSE 100-listed software group Sage, down 1p at 223.2p, from its most preferred list to its least preferred list of tech stocks. "The shares [have] performed relatively well over the past month, which included the full-year results. Analyst models were upgraded as the underlying profitability for Sage was better than expected," the broker said. "However, now we see no catalyst for the coming months and the 2010 story (with no return of growth until the second half and no real margin improvement) does not look overly exciting."

Start your day with The Independent, sign up for daily news emails
ebooks
ebooksA celebration of British elections
  • Get to the point
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

Ashdown Group: Editor-in-chief - Financial Services - City, London

£60000 - £70000 per annum + benefits : Ashdown Group: A highly successful, glo...

Ashdown Group: Junior Application Support Analyst - Fluent German Speaker

£25000 - £30000 per annum + benefits: Ashdown Group: A global leader operating...

Guru Careers: Management Accountant

£27 - 35k + Bonus + Benefits: Guru Careers: A Management Accountant is needed ...

Guru Careers: Project Manager / Business Analyst

£40-50k + Benefits.: Guru Careers: A Project Manager / Business Analyst is nee...

Day In a Page

General Election 2015: ‘We will not sit down with Nicola Sturgeon’, says Ed Balls

'We will not sit down with Nicola Sturgeon'

In an exclusive interview, Ed Balls says he won't negotiate his first Budget with SNP MPs - even if Labour need their votes to secure its passage
VE Day 70th anniversary: How ordinary Britons celebrated the end of war in Europe

How ordinary Britons celebrated VE Day

Our perception of VE Day usually involves crowds of giddy Britons casting off the shackles of war with gay abandon. The truth was more nuanced
They came in with William Caxton's printing press, but typefaces still matter in the digital age

Typefaces still matter in the digital age

A new typeface once took years to create, now thousands are available at the click of a drop-down menu. So why do most of us still rely on the old classics, asks Meg Carter?
Discovery of 'missing link' between the two main life-forms on Earth could explain evolution of animals, say scientists

'Missing link' between Earth's two life-forms found

New microbial species tells us something about our dark past, say scientists
The Pan Am Experience is a 'flight' back to the 1970s that never takes off - at least, not literally

Pan Am Experience: A 'flight' back to the 70s

Tim Walker checks in and checks out a four-hour journey with a difference
Humans aren't alone in indulging in politics - it's everywhere in the animal world

Humans aren't alone in indulging in politics

Voting, mutual back-scratching, coups and charismatic leaders - it's everywhere in the animal world
Crisp sales are in decline - but this tasty trivia might tempt back the turncoats

Crisp sales are in decline

As a nation we're filling up on popcorn and pitta chips and forsaking their potato-based predecessors
Ronald McDonald the muse? Why Banksy, Ron English and Keith Coventry are lovin' Maccy D's

Ronald McDonald the muse

A new wave of artists is taking inspiration from the fast food chain
13 best picnic blankets

13 best picnic blankets

Dine al fresco without the grass stains and damp bottoms with something from our pick of picnic rugs
Barcelona 3 Bayern Munich 0 player ratings: Lionel Messi scores twice - but does he score highest in our ratings?

Barcelona vs Bayern Munich player ratings

Lionel Messi scores twice - but does he score highest in our ratings?
Martin Guptill: Explosive New Zealand batsman who sets the range for Kiwis' big guns

Explosive batsman who sets the range for Kiwis' big guns

Martin Guptill has smashed early runs for Derbyshire and tells Richard Edwards to expect more from the 'freakish' Brendon McCullum and his buoyant team during their tour of England
General Election 2015: Ed Miliband's unlikely journey from hapless geek to heart-throb

Miliband's unlikely journey from hapless geek to heart-throb

He was meant to be Labour's biggest handicap - but has become almost an asset
General Election 2015: A guide to the smaller parties, from the the National Health Action Party to the Church of the Militant Elvis Party

On the margins

From Militant Elvis to Women's Equality: a guide to the underdogs standing in the election
Amr Darrag: Ex-Muslim Brotherhood minister in exile still believes Egypt's military regime can be replaced with 'moderate' Islamic rule

'This is the battle of young Egypt for the future of our country'

Ex-Muslim Brotherhood minister Amr Darrag still believes the opposition can rid Egypt of its military regime and replace it with 'moderate' Islamic rule, he tells Robert Fisk
Why patients must rely less on doctors: Improving our own health is the 'blockbuster drug of the century'

Why patients must rely less on doctors

Improving our own health is the 'blockbuster drug of the century'