Yesterday's trading: Dealers connect with Vodafone
It's not often dealers see Vodafone jump 6.4% in one trading session. It happened yesterday when shares of the mobile phone giant buzzed 11½p higher to a six year peak of 189¾p.
Early buying was sparked by France Telecom's forecast busting third-quarter sales figures and its positive comments about growth at Orange, its UK mobile phone business. Dealers said surely that must augur well for Vodafone's interim results on November 13.
But it was renewed speculation that boss Arun Sarin and the board have decided to sell its 45% stake in Verizon Wireless, the second largest US mobile operator, that really got punters plugged in.
Vodafone bought the asset for £10bn and it is worth £30bn-plus. Sarin said in August that the board had no plans to dispose of the shareholding, but whispers yet again suggest that it has recently received an offer from coowner Verizon Communications that it simply cannot refuse.
Another jackanory doing the rounds suggested that as soon as it can say cheerio to Verizon, Vodafone will say hello to Carphone Warehouse, 13p better at 349¼p.
The two announced on Wednesday that they had buried the hatchet and teamed up on a low-cost mobile service called Talkmobile. Last year, Carphone's shares plummeted after Vodafone dumped Charles Dunstone's company and signed an exclusive tie-up with Phones4U to sell to UK contract customers.
Every penny movement in Vodafone's share price accounts for 3 points either way on the Footsie and so its 33 point-plus contribution helped the UK's premier index jump 105.6 points before closing 94.3 points up at 6,576.3.
Volatile Wall Street, which had rallied strongly late Wednesday on hopes for an early cut in US interest rates, initially lost 50 points despite good quarterly figures from Motorola and Bristol Myers Squibb.
It then bounced on hearing sales of new US homes rose by an unexpected 4.8% in September after they had fallen to the slowest pace in more than a decade in August.
Clients of ABN Amro checked into Intercontinental Hotels, 61p up at 1095p, after the broker lifted its target price to 1510p from 1390p. It obviously likes the group's plan to revamp its 3,125 strong Holiday Inn chain.
A revival of the ancient HSBC (½p easier at 908½p) takeover rumour accompanied a 34½p gain to 779p in insurance giant Prudential. International bank Standard Chartered added 68p to 1721p on speculation that Singapore investment company Temasek has added to its 11.1% stake.
Miner Rio Tinto soared 147p to 4235p as rumours of a possible bid from BHP Billiton (57p dearer at 1798p) refuse to lie down.
Recovery hopes lifted department store Debenhams 7¼p to 112¼p. A recent trading statement showed that cash generation remains strong and despite credit crunch worries, Debs is confident of avoiding breaching its banking covenants.
Contract news helped Aero Inventory soar 45p to 633p. The company which stocks and supplies spare parts for the maintenance and repair of aircraft has signed a letter of intent with Air Canada Technical Support to enter into a contract worth £500m over 10 years. This follows on from the £800m/10 year contract with Qantas announced last year. Numis lifted its target price 15% to 775p.
Risk consultancy services group Wyatt eased 1p to 14p despite chairman Bob Holt's purchase of 125,000 at 13½p.
After broker Ambrian cleared a overhang of 650,000 shares, electronics equipment group Block Shield advanced 9p to 92½p. Dealers also heard that a lucrative overseas order could be on the cards.
Sports and entertainment marketing and consultancy company CSS Stellar crashed 6p to 27½p. An ongoing investigation into apparent inconsistencies in the payment of commissions and bonuses to certain employees has been widened to include the period beginning January 1, 2005. The investigation is to be handled by external accountants.
A Charles Stanley recommendation helped Vanco rise 8½p to 180½p. The broker believes that shares of the global Virtual Network Operator have the capacity to double in a year, and triple in three. A Daniel Stewart target price of 20p helped e-commerce focused marketing services group Twenty edge ¾p forward to 12 ½p.
Buying on hopes for its nickel interests in Western Australia swelled turnover in Braemore Resources to a meaty 20m. The close was 1¾p better at a year's high of 16½p.
• Buying interest in Hardide, ¼p off at 10¾p, should soon revive. Word is the provider of surface engineer technology has tied up a global supply agreement with gases giant BOC. It apparently will ensure the security and quality of supply of tungsten hexaflouride, the group's most expensive raw material, at a reduced price. It will save the group a minimum of £600,000 over the first three years.
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