Market Report: Wiggins effect set to speed up Halfords
Dennis Millard must surely be one of Bradley Wiggins' biggest fans. Although there's no evidence yet the chairman of Halfords – and currently the man in charge until the search for a new chief executive is complete – has strapped on a pair of imitation sideburns, he will no doubt have been celebrating Monday's gold medal-winning performance by the "king of the Mods".
The boost the bicycles retailer could get from Wiggo's success in the time trial was being highlighted yesterday, with Seymour Pierce's Kate Calvert using the opportunity to reiterate her "buy" recommendation on the stock.
As well as the Wiggins effect, the analyst added that Halfords will get a boost from the track cycling, which kicked off yesterday.
Although Halfords is not a sponsor of Wiggins, Ms Calvert pointed out the company has teamed up with both Chris Boardman - a gold medallist in Barcelona in 1992 – and current star Victoria Pendleton to produce bikes.
She also said last month's resignation of David Wild as chief executive was "a positive turning point for the shares" and added that the company's cashflow was "strong enough to maintain the dividend... and could attract corporate activity", as Halfords advanced 2p to 205.5p.
Early gains which saw the FTSE 100 hit its highest level since the start of May were wiped out after Mario Draghi failed to come up with convincing measures to support eurozone bonds.
Amid weak volumes, which added to volatility, the blue-chip index ended down 50.52 at 5,662.3
Bank stocks were particularly hard hit because of their eurobond holdings, with Barclays off 6p at 162.3p and Lloyds Banking Group down 1.31p at 29.39p.
Claims that ministers have been discussing whether it may be time to fully nationalise Royal Bank of Scotland meanwhile failed to revive the bank ahead of its results today.
According to overnight reports, ministers have talked about the possibility as a way to boost the amount RBS lends to small businesses, although apparently George Osborne and the Treasury are against the idea.
With many sceptical over the likelihood of it happenning, the chatter failed to revive the group's share price, which sank 10.9p to 204.5p, near the bottom of the leaderboard
Liberum Capital's Cormac Leech said full nationalisation was "unlikely" for a number of reasons, including his belief that "RBS is clearly on the road to recovery (albeit more circuitously than some envisaged)", although the analyst added "if a buyout did occur it would likely be at a premium to the current share price". Meanwhile, the scribblers at Oriel Securities were rather more frank. "Nationalisation would be nuts" was their view, going on to say that "the Government should just get on and do what is was elected to; fix the economy and stop telling world-class operators such as Stephen Hester, how to do their job."
The prosthetics maker Smith & Nephew topped the leaderboard, climbing 15.5p to 675p as it announced a 50 per cent jump in its half-year dividend alongside its interim results.
Down on the FTSE 250, Spirent Communications slumped a huge 23.8p – or 14 per cent – to 144.7p after the supplier warned its growth over the second six months of the year would not be as high as expected.
Also deep in the red was Ophir Energy. The Africa-focused explorer plummeted by 60.5p to 522p on the news that its Papa-1 well off the shore of Tanzania had not found as much natural gas as the Square Mile had been hoping for.
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