Market report: Thursday close
Copper-watchers were on bid alert tonight as the rumour mill had it that an offer could be coming in for Kazakhstan miner Kazakhmys.
Mickey Clark, Evening Standard
The FTSE 100-quoted giant's shares surged more than 8% on talk of a bid on its way from Eurasian Natural Resources Corp (ENRC) - another Kazakh miner with shares listed in London. ENRC, long a potential bidder for its rival, is known to be thinking of stumping up well over £11bn to get access to the vast reserves of its peer. The talk today was of a tilt priced at 2500p. So it was no surprise to see the Kazakhmys price jump 176p to 1914p. ENRC's London stock jumped 72p to 1288p.
Also much in demand as trading drew to a close was software giant Sage after brokers rushed to buff up their forecasts for profits this year. Sage shares raced to the top of the Footsie 100 leaderboard after it beat profit forecasts for its first-half figures. Sage shares have been having a pretty strong run since bottoming below 190p in March on concerns about its US operations. Today's rally, up 15½p to 226½p, was a reward for a 9% jump in half-year profits and a relatively upbeat outlook statement.
It was a bit like the morning after the night before for Enterprise Inns.
The shares ran into profit-taking, dropping 11p to 499p following yesterday's announcement that the pubs chain is eligible to convert into a real estate investment trust (Reit), which offers favourable tax treatment.
But Morgan Stanley has dropped its rating on the shares from overweight to equalweight, claiming the overweight call was based entirely on a successful Reit conversion. The broker is urging clients to take profits now this has been priced into the shares. It is confident of further scope for improvement in the share price, but is nervous about underlying pub trading. Its profit forecast, which remains unchanged, is 10% below consensus.
The trouble is that pubs face growing competition from supermarkets, and have a rigid cost base. More drinkers are buying cheap booze from the supermarkets and staying home rather than forking out three quid for a pint. Greene King was down 5½p to 585p, and Marston's fell 9¼p to 224¾p.
Better-than-expected US employment numbers kept Wall Street out of negative territory this afternoon - but only just. The Dow was up 18.8 at 12,833.2.
The Bank of England's no-change decision on interest rates, followed by the same decision by the European Central Bank, did little to lift the mood in London, where the FTSE 100 fell 8.9 points at 6252.1. However it eventually closed up 9.85 to 6,270.80.
Citigroup has begun coverage of Dana Petroleum with a buy rating and 2150p target. The broker says recent success at the West Rinnes exploration well in the North Sea has put it back in the spotlight and lifted the shares by around 400p - a rational reflection of the success, in its view. Dana shares jumped 11p to 1790p on the upbeat note.
Old Mutual tumbled 1.4p to 124.8p after hacking off investors with a drop in profit margins and virtually flat firstquarter sales because of weakness in the UK. It may even miss one of its key 2008 funds targets. OM had already been one of the lowest-valued stocks in the sector. UK sales were down 18% as unit trust sales were hit by volatile markets and tax changes. It bulked up in the UK and Europe with its takeover of Skandia in 2006, Cazenove brokers said that deal now looks like a mistake.
Platinum giant Lonmin got an easy ride considering it pulled one of its output targets. Power shortages in South Africa mean it may not now be able to bulk up its production by building planned new mines. But the shares rose 196p to 3408p as investors focused on the 63% jump in first-half profits.
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TOMORROW'S AGENDA
• Enterntainment chain HMV is tipped to buck the trend of miserable sales figures from stores groups in its trading update, having benefited from a surge in demand for computer games. Analysts believe the group, which also owns Waterstone's, will show an 8% rise in like-for-like sales at its main division but with international sales down 1.7%. In March 2007, chief executive Simon Fox unveiled a three-year plan to turn round HMV, which had been hit by falling music sales and tough competition from supermarkets, online stores and downloads.
• Figures from the Ministry of Justice are expected to show property repossessions soared in the first three months of this year as the credit crunch hit homeowners. The number of families losing their homes rose 6% in the last quarter of 2007 and analysts believe it will have risen again as increasing numbers of borrowers were unable to re-finance expired fixed-rate mortgage deals.
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