Market Report: Waste business sees City dump Pennon 

 

Investors were putting shares in Pennon out with the rubbish yesterday, as Credit Suisse decided to dump the water and waste specialist.

Credit Suisse analysts said the big concern is its struggling Viridor waste-management business which could be hit by pricing pressure as competition increases.

Credit Suisse downgraded it to underperform and said the supply of energy from waste is increasing, while demand is falling, leaving Viridor looking weak. The Credit Suisse team gave Pennon a 610p price target. It was ditched by the City and lost 27p to 699.5p – taking the wooden spoon on the mid-cap index. Previously, some traders had rumoured French services company Veolia could be interested in Viridor but others now think that this is unlikely.

Fellow utilities stocks were also out of favour and United Utilities was 3.5p weaker at 680.5p while Severn Trent trickled down 3p to 1,733p.  Also in the water sector yesterday, regulator Ofwat came out against Thames Water’s plan to try to hike customer water bills by almost £30 next year.

The wider market was going nowhere and the FTSE 100 slipped back 5.18 points  to 6,583.8.

David Madden, market analyst at spreadbetter IG, said: “Traders find themselves under less pressure now the Syrian situation has cooled down. An immediate strike on Syria appears to be off the table since President Assad has agreed to hand over chemical weapons, and this has brought stability to the markets.”

But traders may already be focusing on what is to come out of the US next week. Mike van Dulken, head of research at Accendo Markets, said: “Uncertainty dominates into the weekend before the Fed’s update next Wednesday and likely announcement of tapering. The Fed takes centre stage in investors’ minds for now.”

Mobile phone giant Vodafone has secured enough shares in Germany’s Kabel Deutschland for its €7.7bn (£6.4bn) offer to succeed and iots shares ticked up 1.9p to 212p.

Taiwan’s MediaTek has picked out its favourite supplier and the result was good news for shareImagination Technologies shareholders. Imagination had been up against larger rival and fellow smartphone microchip designer Arm Holdings to win MediaTek’s heart.

However, it emerged yesterday that the latter has signed an extended licence agreement with Imagination for its graphic chips and it certainly seem happy. MediaTek’s chief marketing officer, Johan Lodenius, said: “We are pleased with this multi-year agreement which will deliver the next wave of success for both companies across key segments.”

The win sent Imagination up 10 per cent as MediaTek makes up around 15 per cent of its total royalty revenue.

Liberum Capital’s scribblers explained: “Fears that Arm was gaining share at MediaTek was a drag on Imagination’s share price of late.

“This licensing agreement may signal that Imagination is going to hold onto its high share at this very important licensee.”

It also comes after a run of good news for Imagination including the announcement this week that Apple’s new phones are likely to use Imagination’s know-how, while US wireless and  broadband group Broadcom’s purchase of Imagination customer Renesas LTE could give the company a foothold at the  US group.

Imagination developed a 32.3p – or 10.5 per cent – lead to 339.7p and it took the top spot on the mid-tier table. Arm Holdings was weaker after the news and finished the day down 14.5p to 972p

Industrial conveyor belt maker Fenner travelled up 20.1p to 407.4p after analysts at UBS rated it a buy and said it has structural growth still to come after a positive set of results earlier this week.

They gave it a 460p price target and said it is the lowest rated of the UK engineers because the market is too focused on the plight of “European mining” but Fenner has growth potential in other markets.

Oil and gas engineering group Kentz said it has successfully fought off two suitors in a bid to keep its independence. On Thursday it revealed Amec had walked away from upping its £690m offer and yesterday it confirmed Stuttgart-based  M+W Group had also declined to increase its bid. Kentz slipped 7p to 492p.

On Aim, engineering support services outfit Redhall Group issued a profit warning and said it expects second-half trading to be below management expectations as restructuring costs have weighed on the group, which was 12.5p weaker at 43.5p.

Clinical software supplier EMIS has bought healthcare IT specialist Ascribe Group for £57.5m and placed 4,400,000 new shares at 615p, raising £27.1m to fund the acquisition. It finished the day down 28p to 635p.

Buy

Halfords

Peel Hunt has given Halfords the thumbs up, describing it as “a turnaround story with momentum”. The broker has raised its price target for the group — presently 406p — from 400p to 475p and believes that the new management team at the bike and car parts retailer “can deliver a clear improvement in retail standards relatively quickly”.

Sell

Debenhams

But it’s not all beer and skittles in the world of retail and Cantor Fitzgerald recommends selling Debenhams. The broker says it expects the “subdued consumer environment” to continue, which might stop the retailer returning to growth soon. It has a 70p target for the shares, which ended at 102p.

Hold

Bellzone Mining

Keep a firm grip on Bellzone, Canaccord Genuity advises. The broker thinks the Africa-based iron ore miner’s recent update shows that “management is getting close to a viable first-stage development plan” for its large Kalia deposit in Guinea. It has a 4.2p target on the shares, which closed at 4.24p.

Start your day with The Independent, sign up for daily news emails
News
US comedian Bill Mahr
people
Voices
Winston Churchill, then prime minister, outside No 10 in June 1943
voicesA C Benson called him 'a horrid little fellow', George Orwell would have shot him, but what a giant he seems now, says DJ Taylor
Sport
football
News
Rob Lowe
peopleRob Lowe hits out at Obama's snub of Benjamin Netanyahu
PROMOTED VIDEO
News
Davies (let) says: 'Everybody thought we were having an affair. It was never true!'
people'Our friendship flourished online. You can share some very revelatory moments at four in the morning…'
Arts and Entertainment
Over their 20 years, the band has built a community of dedicated followers the world over
music
News
Staff assemble outside the old City Road offices in London
mediaThe stories, the writers and the changes over the last quarter of a century at Britain's youngest paper
Life and Style
The Oliver twins, Philip and Andrew, at work creating the 'Dizzy' arcade-adventure games in 1988
techDocumentary looks back at origins of the computer-games industry
Arts and Entertainment
Krall says: 'My hero player-singer is Elton John I used to listen to him as a child, every single record
music
News
Friends for life … some professionals think loneliness is more worrying than obesity
scienceSocial contact is good for our sense of wellbeing - but it's a myth that loneliness kills, say researchers
ebooks
ebooksA year of political gossip, levity and intrigue from the sharpest pen in Westminster
Arts and Entertainment
The Wu-Tang Clan will sell only one copy of their album Once Upon A Time In Shaolin
musicWu-Tang Clan and The Sexual Objects offer fans a chance to own only copies of their latest albums
News
i100
Environment
Number so freshwater mussels in Cumbria have plummeted from up to three million in the 20th century to 500,000
environment
Life and Style
Models – and musicians – on the catwalk in Dior Homme for the men’s 2015/16 fashion show in Paris
fashionAt this season's Paris shows, various labels played with the city boys' favourite
News
i100
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: Tax Assistant

Negotiable: Recruitment Genius: A Tax Assistant is required to join a leading ...

Recruitment Genius: Outbound Sales Executive - OTE £25,000

£16000 - £25000 per annum: Recruitment Genius: This is an exciting opportunity...

Ashdown Group: Java Developer / J2EE Developer - Watford - £45,000 - £47,000

£45000 - £47000 per annum + bonus + benefits: Ashdown Group: Java Developer / ...

Ashdown Group: Marketing Product Manager - (Financial Services) - SW London

£35000 - £38000 per annum + Benefits: Ashdown Group: Marketing Manager - Marke...

Day In a Page

Iraq invasion 2003: The bloody warnings six wise men gave to Tony Blair as he prepared to launch poorly planned campaign

What the six wise men told Tony Blair

Months before the invasion of Iraq in 2003, experts sought to warn the PM about his plans. Here, four of them recall that day
25 years of The Independent on Sunday: The stories, the writers and the changes over the last quarter of a century

25 years of The Independent on Sunday

The stories, the writers and the changes over the last quarter of a century
Homeless Veterans appeal: 'Really caring is a dangerous emotion in this kind of work'

Homeless Veterans appeal

As head of The Soldiers' Charity, Martin Rutledge has to temper compassion with realism. He tells Chris Green how his Army career prepared him
Wu-Tang Clan and The Sexual Objects offer fans a chance to own the only copies of their latest albums

Smash hit go under the hammer

It's nice to pick up a new record once in a while, but the purchasers of two latest releases can go a step further - by buying the only copy
Geeks who rocked the world: Documentary looks back at origins of the computer-games industry

The geeks who rocked the world

A new documentary looks back at origins of the computer-games industry
Belle & Sebastian interview: Stuart Murdoch reveals how the band is taking a new direction

Belle & Sebastian is taking a new direction

Twenty years ago, Belle & Sebastian was a fey indie band from Glasgow. It still is – except today, as prime mover Stuart Murdoch admits, it has a global cult following, from Hollywood to South Korea
America: Land of the free, home of the political dynasty

America: Land of the free, home of the political dynasty

These days in the US things are pretty much stuck where they are, both in politics and society at large, says Rupert Cornwell
A graphic history of US civil rights – in comic book form

A graphic history of US civil rights – in comic book form

A veteran of the Fifties campaigns is inspiring a new generation of activists
Winston Churchill: the enigma of a British hero

Winston Churchill: the enigma of a British hero

A C Benson called him 'a horrid little fellow', George Orwell would have shot him, but what a giant he seems now, says DJ Taylor
Growing mussels: Precious freshwater shellfish are thriving in a unique green project

Growing mussels

Precious freshwater shellfish are thriving in a unique green project
Diana Krall: The jazz singer on being friends with Elton John, outer space and skiing in Dubai

Diana Krall interview

The jazz singer on being friends with Elton John, outer space and skiing in Dubai
Pinstriped for action: A glimpse of what the very rich man will be wearing this winter

Pinstriped for action

A glimpse of what the very rich man will be wearing this winter
Russell T Davies & Ben Cook: 'Our friendship flourished online. You can share some very revelatory moments at four in the morning…'

Russell T Davies & Ben Cook: How we met

'Our friendship flourished online. You can share some very revelatory moments at four in the morning…'
Bill Granger recipes: Our chef serves up his favourite Japanese dishes

Bill Granger's Japanese recipes

Stock up on mirin, soy and miso and you have the makings of everyday Japanese cuisine
Michael Calvin: How we need more Eric Cantonas to knock some sense into us

Michael Calvin's Last Word

How we need more Eric Cantonas to knock some sense into us