Market report: Monday close

By Mickey Clark for MailOnline
Updated: 12:00 EDT, 9 July 2007

Marks & Spencer boss Stuart Rose will have his work cut out this week. Not only will he have to explain to shareholders why sales growth has slowed dramatically but he may also have to bid farewell to George Davies, founder of the retailer's highly successful womenswear range Per Una.

Davies threatened to step down a couple of years ago but was persuaded to stay on with the promise of a new deal that netted him a £2.4m bonus. But it looks as though he wants to move on now his contract has run out.

It could not have come at a worse time for Rose, who is likely to report tomorrow that food and non-food sales have slowed considerably. Some brokers, such as HSBC, suggest there will be no growth at all. One reason for the slowdown, they say, is the poor weather this summer. This will be embarrassing for Rose, who famously said last year that 'weather is for wimps'.

HSBC has slashed its target from 725p to 675p and says: 'The summer season is already a washout and obscures the macro-driven consumer spending slide'.

But M&S today rose 4p to 632p as shares generally took their lead from a strong performance on Wall Street on Friday, and gains in the Far East this morning. The FTSE 100 index put on 22.6 to 6712.7.

Cable & Wireless firmed 0.2p to 196.2p despite Morgan Stanley downgrading it from overweight to equal-weight because there is better value elsewhere. The broker prefers Vodafone in the telecoms sector, and complains that visibility on Cable & Wireless's UK business remains very low. It has repeated its 210p price target.

Citigroup has cut Regus, down 1¾p at 145p, from buy to hold in a review of the support services sector. The broker continues to expect 11% earnings growth for the sector in 2007 despite 19% growth last year against its forecast of 15%.

The better-than-expected performance was not only down to operational improvements but also lower tax payments. Citigroup says the sector is still under-leveraged, but less so than six months ago.

White Nile, the oil explorer headed by former England cricketer Phil Edmonds, slumped 5p to 85p on reports the Sudan government had asked it to withdraw from a disputed project.

That will be bad news for all those investors who subscribed for new shares at 100p as White Nile raised fresh funds. Central African Mining & Exploration firmed 5&frqac34;p to a high for the year of 71¾p after it emerged that Lehman Brothers now holds 67.1m shares, or 5.46%.

Nicola 'Superwoman' Horlick's latest investment offering, Bramdean, achieved a modest premium as dealings got under way. The shares, which were sold at 100p, settled at 104p. The fund raised just £131m from investors, well short of the £250m Horlick had been hoping for but almost twice the minimum value she had set.

She blamed difficult market conditions for the limited demand. The fund will invest across private equity, hedge funds and speciality asset classes, and has already committed to a number of investments including Terra Firma and SVG Capital Strategic Recovery.

It was the first day of dealings on the junior Plus market for software specialist Pathway One following a placing of 20.5m shares, which were up ½p at 10½p.