Market report: Monday close
Recently floated defence technology specialist QinetiQ was singled out by City speculators today amid growing hopes that it may be about to land a £10bn Ministry of Defence contract.
QinetiQ is part of the Metrix consortium, which is in the running to operate a military training academy at St Athan in Wales. Metrix, which also includes property giant Land Securities, is up against MC3, a consortium headed by BAE Systems and including VT and Carillion.
The Government has yet to make a final choice on the bids but Peter Hain, Secretary of State for Northern Ireland and Wales, has already said he is impressed by the Metrix bid. Broker Numis says that if Metrix is awarded the contract, it would be worth about 25p a share to QinetiQ, which was privatised earlier this year at about 200p.
It has failed to live up to investor expectations, and the Government has been charged with a conflict of interest over Metrix as it continues to hold 20% of QinetiQ shares. Numis believes that if Metrix wins both packages involved in tendering, it would give a short-term boost to QinetiQ's shares, which today rose 5½p to 188p.
London shares were generally on the slide again, reflecting falls in New York and the Far East that were sparked by fresh worries about a slowdown in the US economy.
The FTSE 100 index, which hit a five-year high last week, fell 34.1 points to 6128.8. In America, the Dow Jones index opened 32.2 lower at 12,058.1. Standard Life was the best blue-chip performer, down ¾p to 306¼p on reports that French insurer Axa is mulling a bid for the recently floated group.
Bridgewell has begun coverage of engineer Fenner, up 1½p at 225¼p, at overweight with a target price of 250p. The broker said the coal-mining industry's recovery bodes well for the group's conveyor belting operations, which account for 55% of profits. Bridgewell views the advanced engineered products division as a quality niche business with potential for strong organic sales growth.
AIM-listed EMED Mining slipped 1p to 9p after arranging a placing of 20.8m shares at 9¼p to raise £1.7m. The gold miner said last week that initial results for the first three prospects tested in a drilling programme in Slovakia were 'excellent'. A gold system has already been discovered in the Detva licence area.
AIM-listed Bartercard had its shares suspended at 4½p today. Financial adviser Nabarro Wells has resigned, and the company said last month that it expected to report losses totalling £1.9m and was working with its auditors to finalise its accounts. It blamed one-off charges.
A profits warning from IGM left the shares nursing a loss of 4½p, or 28%, at 11½p. The instant messaging and chatline services group says it will make a loss this year, and has parted company with chief financial officer Kim Seng Teh.
A profits warning took its toll on Cornwell Management, down 4½p at 11½p. The supplier of independent management and IT consultancy services expects a full-year pre-tax loss after a disappointing performance in the third quarter. The AIM-listed company also said it had started a review of its strategic options 'to consider the future of the business'.
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