Footsie loses faith in Blair

By Geoff Foster for MailOnline
Updated: 03:04 EDT, 8 September 2006

ALL bets were off as political uncertainties dragged the Footsie down a further 71.2 points to 5858.1 for a two-day drop of 123.6 points.

Convinced that it will be impossible for Prime Minister Tony Blair to hold down the highest office in the land until May with his support within the Labour party diminishing by the day, investors decided to give the market a wide berth.

The Bank of England's decision to keep UK interest rates on hold at 4.75% failed to stop the rot and an early 76-point decline on Wall Street ruined any lingering hopes of a late rally.

Shock news that Peter Dicks, the non-executive chairman of Sportingbet, had been arrested in New York prompted an immediate suspension of the online sports betting group's share price at 239p (down 5p).

It sparked heavy selling of the rest of the speculative sector which was rocked in July by BetonSports' chief executive David Carruthers US arrest on racketeering, conspiracy and fraud charges.

World Gaming, which had been in the middle of a £56.6m takeover talks with Sportingbet, crashed 27½p to 64½p on fears that a deal will not now materialise.

Footsie constituent PartyGaming collapsed to 94¾p on an avalanche of selling before closing 11½p lower at 105¾p. Turnover swelled to 216m.

Other sector casualties included 888 Holdings which lost 27p to 144p, Gaming VC 12½p to 292½p, Leisure & Gaming 25½p to 48p and Playtech 25p to 247½p.

Neteller, which operates a secure online funds transfer service, was also tarred with the same brush and closed 94p down at 336p.

Shining like a beacon amidst the gloom was Centrica as rumours of an imminent £ 12bnplus cash offer from Norwegian energy giant Norsk Hydro intensified. Shares of the parent company of British Gas added 4¼p more to 311½p.

Scottish & Southern Energy buzzed 15p higher to 1230p after Citigroup upgraded to buy from hold and lifted its target price to 1350p from 980p.

British Telecom dipped 4p to 245½p amid speculation that Goldman Sachs was trying to place a lump of 30m shares at 246p.

Worries about the slowing US housing market left UK plumbing giant Wolseley 35p down at 1115p and aggregates group Hanson 14p off at 658p.

Selling amid vague rumours of a cautious trading statement left ITV 4p lower at 101½p.

In line interims and bullish comments from broker Bridgewell who believes it to be the most interesting UK midcap exploration and development play helped Soco International gush 23p to 1352p. The company has interests in Vietnam and the Yemen.

Support services group SHL jumped 26¾p to 171½p on hearing it is in advanced discussions which could lead to a recommended cash offer for the company at 180p per share.

Analysts believe that considering the company is the world's largest psychometric testing business, other bidders will appear leading to a possible auction.

Stanley Leisure edged up 1½p to 842p as Fred Done, the largest independent bookmaker in Britain with 256 shops, increased his shareholding to 2.46% from 1.16%.

Malaysian 19.8% shareholder Genting has made an approach to Stanley which dealers say could result in a cash offer of around £10 a share. Aim-listed interactive content and services provider Yoomedia firmed ⅛p to 2p after signing a contract with Playboy Enterprises to provide a casino-style gaming service for Playboy's range of satellite TV channels and mobile phones services.

Struggling lottery game group Chariot (UK) cheapened ½p to 2⅞p following the cautious tone of chairman Peter Jones' agm address. He said the group is facing a number of challenges in executing its revised business plan for its alternative lottery game.

Bright Things soared 15¼p to 18¾p after saying it has received positive trading interest in demonstration versions of its forthcoming DVD game release of Tomb Raider - The Action Adventure.

Reflecting its second-half profits recovery MKM Group gained 1¼p at 6½p.

Introduced to Aim at 11¾p, shares of Canadian-branded cosmetics and skin-care group Faces Cosmetics closed at 13p.

Aim Resources added 1¼p at 6p after stating it expects to start full production of the Africa Perkoa zinc project 12 months earlier than originally planned.

• AHEAD of its sponsorship of tomorrow's St Leger classic at Doncaster, Ladbrokes edged up ½p to 378½p on comments from JP Morgan. It has been a disappointing performer since the disposal of Hilton hotels and the broker believes the market is taking too short term a view.

Investors willing to stay the course will be rewarded by deregulation, international expansion, continued growth in eGaming and potential cash returns.