Market Report: All the chat is of a US suitor for Cupid

Laura Chesters
Tuesday 02 October 2012 21:12

According to the dating website, one in five relationships are now started online. City traders reckon Match's US owner, InterActiveCorp, wants to start a relationship with AIM-listed Cupid. The rumours did the rounds in August but some dealers now reckon it is a bit more than vague speculation.

Cupid, run by serial technology entrepreneur Bill Dobbie, completed its £7m deal to buy military love site Uniform Dating on Monday and placed £3.6m shares to fund the deal. City chatter is it is now "in play" and it fluttered up 8.5p to 206p at more than five times its average daily volume. Cupid has previously denied it received any formal marriage proposal but traders say it has certainly been showing some ankle.

It's been said before, but it is looking even more unlikely that taxpayers will get back the £65bn invested in the bailed-out Lloyds Banking Group and Royal Bank of Scotland. City scribblers at UBS slashed their share-price targets for Barclays, RBS and Lloyds, and downgraded them to neutral from buy. UBS, which acts as a broker to RBS and Lloyds, is concerned following the Bank of England's demand last week that banks should start to look to the bond markets to raise their capital base.

UBS analyst John-Paul Crutchley said: "We have reduced our price targets by 10 per cent at RBS and 12 per cent at Lloyds to recognise the uncertainty around the potential equity issuance given legacy issues at both; we have also delayed Lloyds dividend resumption into 2014."

Barclays lost 1.6p to 220.75p, Lloyds fell 0.95p to 39.025p and RBS sank to the bottom of the blue-chip index, down 8.9p at 257.5p.

Falls in banks and mining shares meant the FTSE 100 couldn't hold on to yesterday's gains, and it lost 11 points to 5809.45. Expectations increased that Spain is ready to seek a bailout, which will trigger ECB bond-buying, but talk that Germany wants it to postpone this meant investors opposed risk and the benchmark index stayed in negative territory.

Austerity Britain and cutbacks might be bad for business. But for defence services group Babcock International severe government cost reductions have helped, not hindered. Babcock shot up 22.5p to 945p, as the cuts helped it report a strong first half. More cuts mean more is being outsourced to companies such as Babcock.

The company, which among other things maintains British Navy submarines and ships, expects the outsourcing trend to continue, and said its order book remained stable at around £13bn.

Christopher Bamberry, an analyst at Peel Hunt, gave the stock a buy rating with a target share price of 975p.

BG Group, the exploration arm of the former British Gas, got a boost from scribes at Nomura who reiterated their buy rating with a target price of 1,700p. The shares hissed up 21p to 1,300p, and Nomura's Alan MacDonald said the group is "under-appreciated by the market both from a financial perspective and for its strategic value".

Punters with an interest in oil and gas will be awaiting news from an oil analysts' trip to Kenya this week. Tullow Oil shares spurted up 13p to 1,410p.

ITV gained for a second session, up 0.65p to 90.6p, as vague rumours rumbled on that the broadcaster could be the subject of a bid from private equity. Today at 5pm is the Takeover Panel's deadline for the confirmation of proposed merger of fizzy drinks groups AG Barr and Britvic. The proposed deal values the combined group at £1.4bn, and would create one of the leading soft-drinks companies in Europe. Irn Bru and Rubicon maker Barr fizzed up 5.5p to 454p but Britvic lost some sparkle, down 2.7p to 366.4p.

On the small-caps, some dealers have said Mirror owner Trinity Mirror's shares have been looking cheap since the summer. They gained 5.75p to 59.50p.

Online betting group Sportingbet turned down William Hill's bid on Monday and punters are waiting for the bookie to up its offer to 60p or more. Sportingbet reports full-year results today with strong growth expected. Its lost 0.5p to 53p.

Home shopping group Findel, which owns sports business Kitbag and catalogue firm Kleeneze was up 0.26p to 6.48p ahead of results today.

On AIM, Gemfields gained 4.25p to 41.75p after the company released news on reserves and mining feasibility study. It will unveil full-year results next week.

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