Market report: Yesterday's trading
Nasdaq boss Bob Greifeld must have had a big grin on his face yesterday after shares of the London Stock Exchange fell out of bed on competition fears.
Tuesday's revelation that a seven-strong bunch of investment banks, including heavyweights Citigroup and Goldman Sachs, are planning to start their own pan-European equity trading platform to challenge traditional bourses, sparked heavy selling of the LSE. It collapsed to 1183p before closing 74p lower at 1234p on turnover of 23.9m.
America's techno exchange Nasdaq already owns 25.3% of the LSE and must be quietly delighted to see the shares retreat.
Rumours have been rife that Nasdaq would soon increase its shareholding to 29.9% prior to launching a full-scale bid. Yesterday's sharp sell-off must have tempted Greifeld & his financial advisers to raid the market for some cheapies.
News that Credit Suisse, which used to hold 8.8% of the LSE, has reduced its stake below 3% prompted speculation that Nasdaq had in fact added to its shareholding. But the plot thickened when it was later announced that Citigroup Global Markets had acquired 6.3m shares, or 2.96%.
In the meantime, LSE's chief executive Clara Furse continues to run around like a headless chicken trying to find potential investors or joint venture partners to save the exchange from Nasdaq's clutches.
The Bombay and Japanese bourses have both been approached, but observers continue to suggest it is just a matter of time before Nasdaq, with the help of private equity backers, Hellman & Friedman and Silver Lake Partners, table a knock-out cash offer north of £14 a share.
The threat of a new equity trading platform left PLUS Markets unperturbed at 23p, up ½p. It has already proved to be a successful rival to the LSE with its quote-driven trading platform for small and mid-cap companies.
Nemone Wynn-Evans, business development director, said: 'We very much welcome the prospect of a more competitive equities market, which we recognise is already generating significant benefits to our customers.'
Led higher by a rampant British Airways, which climbed 21¾p to 485p on hearing it has at last reached an agreement in principle with trustees of the New Airways Pension Scheme over a 10-year funding plan to tackle its £2bn deficit, the Footsie jumped 43.2 points to 6229.8.
Wall Street's 86% rise overnight to its 15th record-closing high since early October and its early 29 points gain yesterday buoyed London. Interest in New York was enlivened by news of a £4.2bn bid from US Airlines for Delta Air Lines.
Scottish Power sparked 13½p higher to 752p as rumours of an £8-plus cash and shares offer from Spanish utility Iberdrola intensified. Germany's RWE is waiting to see the colour of the Spaniards' money before launching a knock-out counter offer of its own.
Insurer Old Mutual advanced 6¼p to 178½p as Bear Stearns lifted its target price to 215p from 200p and punters responded to vague takeover talk.
Royal & Sun Alliance added 3¾p to 152p amid speculation that Finnish insurer Sampo, which last week sold its banking business to Danske Bank, is now casting its eye over the UK insurance group.
Prudential firmed 11½p to 661½p on continuing hopes of an offer from HSBC, 5p dearer at 997½p. Aggregates giant and perennial bid favourite Hanson softened 1½p to 760p after the ubiquitous Morgan Stanley placed 6.8m shares at 760p with institutional investors.
A buyer of 7.4m Mitchells & Butlers at 632p raised eyebrows. The close was 7p better at 635½p amid hopes that another bid will soon be made for the All Bar One pubs chain.
Iranian entrepreneur Robert Tchenguiz had a 550p-a-share approach rebuffed earlier this year and could decide to have another go.
Recruitment group Michael Page International jumped 22¼p to 435p after broker UBS raised its target price to 470p from 420p.
Profit taking following excellent interim figures left Touchstone Group 1p off at 178p. Broker Brewin Dolphin says buy and has a 12-month target price of 250p.
Touchstone is Microsoft's number one business solutions partner in the UK for the second year running. Some 75% of turnover in the first half is related to Microsoft products.
Struggling 'Monday' lottery group Chariot (UK) rose 0.325p to 0.75p on hearing that Amvescap now holds 11.2%.
• Aim-listed Software Radio Technology buzzed ½p higher to 56p amid whispers that the Chinese Government is about to place orders for its products.
A spin-off from the former Securicor, SRT has a portfolio of intellectual property which includes technology for Tetra radio mobile phones used by the police and emergency services for secure communications, and designs for AIS satellite tracking systems for ships.
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