Stock market report: Friday close
Could electricals giant DSG International go bust? Some in the City are asking this as analysts scramble to put a value on the company.
Reasons to be cheerful: Shares are expected to open higher - plus its Friday
Pali International's Nick Bubb, one of the leading lights of the retail sector, today questioned whether the business could be in dire straits.
'In theory, net debt of around £100m is well within the group's borrowing limits, but much depends on how much confidence the suppliers have in the business,' he told clients. 'Things could quickly unravel after Christmas.'
He says it is more likely the Currys and PC World owner will limp through next year, and notes that chief executive John Browett could always sell part of the business - the successful Scandinavian arm Elkjop is mooted as a possible candidate - to bolster its balance sheet.
DSG's shares got a kicking yesterday, losing 32% of their value, after credit insurer Atradius reduced cover to suppliers of Britain's largest electronics group. But with stocks broadly in the black, DSG rose ½p to 19¾p, as over 23m shares changed hands.
Setting a new price target of just 18p for DSG, Bubb suggests rival Comet owner Kesa, a penny cheaper at 69p, is better placed to see out the High Street storm. Following three successive days of falls, shares in London ended the week in the black, up over 3% on the day in thin trading. The blue-chip index surged 63.76 points to 4232.97 following a dramatic turnaround in New York yesterday.
Wall Street was no place for the faint hearted last night as the market staged a recovery of over 900 points in the last hour of trading. The index closed down 552.59 at 8835.25, having been down almost 400 points earlier in the day.
One story doing the rounds was that the shares rebound was caused by short covering ahead of the G20 meeting of industrial and emerging nations, as some investors bet world leaders would come up with a miracle plan to deal with the global financial crisis.
Most in the City were sceptical, attributing the gains to a classic bear market squeeze and investors snapping up energy stocks which had plummeted to prices not seen in five years. Today the dow gave back some of those gains, opening 163.67 points lower at 8671.58. It closed at 8517.14 - 318.11 points lower.
Prudential was the star of the show among top stocks thanks to a bullish broker note from MF Global, climbing 20½p to 290p, a rise of over 7%. The insurer's shares have plunged by over a third in the past month, a sell-off MF says is completely unjustified.
Advising clients to fill their boots, they say the current price appears to have nothing to do with either fundamentals or valuations and that its low debt levels and strong balance sheet mean it is one of few companies that investors should not be worried about at the moment. One trader noted that investors were adopting a more risky approach today, snapping up the miners and shunning the defensive household goods and healthcare sectors.
Mining stocks have been heavily sold off this week but were also shining brightly today as the price of copper, nickel, lead and tin rose sharply.
Anglo American stood out with a 43p rise to 1291p, while Xstrata fell 4½p to 947½p and Antofagasta was 10¾p dearer at 339½p. But rival Vedanta Resources was under the hammer amid unrest at a site it is planning to mine in eastern India.
Hundreds of villagers carrying bows and arrows marched in protest at the bauxite mine in hills considered sacred by the tribe, claiming the company has broken its promise to carry out development work in the region.
The protests had held up the plant until the summer when Vedanta got the green light from India's Supreme Court to mine there.
The unrest led Vedanta to claim the Footsie's wooden spoon, its shares sinking to their lowest level in over three years, down 48p at 558p.
City coverage and share tips
This is Money carries breaking City news throughout the day. Bookmark Companies & Markets and try these markets links...
Monday's agenda
Sales on Britain's High Streets sank 2.2% in October, their worst for three years. Whether London is still faring better than the rest of the nation will be revealed when the British Retail Consortium releases its sales monitor. Sales in the capital's shops dipped slightly in September, but tourists have kept tills in London ringing as they take advantage of the weak pound.
Amid fears the UK will enter a sustained and deep recession, the CBI's revised outlook for the coming year is bound to make grim reading. The employers' organisation has already revised down its expectations for growth in 2009 and is tipped to do so again. Meanwhile, Rightmove will add to the gloom with its house price index for November. Last month, the online estate agency reported that the average asking price for a property was down 4.9% on the year as the usual autumn property market bounce failed to materialise.
Most watched Money videos
- BMW's Vision Neue Klasse X unveils its sports activity vehicle future
- Blue Whale fund manager on the best of the Magnificent 7
- How to invest for income and growth: SAINTS' James Dow
- BMW meets Swarovski and releases BMW i7 Crystal Headlights Iconic Glow
- 'Now even better': Nissan Qashqai gets a facelift for 2024 version
- Land Rover unveil newest all-electric Range Rover SUV
- Skoda reveals Skoda Epiq as part of an all-electric car portfolio
- Mail Online takes a tour of Gatwick's modern EV charging station
- Tesla unveils new Model 3 Performance - it's the fastest ever!
- Mercedes has finally unveiled its new electric G-Class
- Mini celebrates the release of brand new all-electric car Mini Aceman
- 2025 Aston Martin DBX707: More luxury but comes with a higher price
- Online trading platform Plus500 suffers fourth...
- Could the Bank of England really cut interest rates this...
- Take That's concert at Co-op Live has moved venue - can I...
- Banks should be forced to disclose why they debank small...
- Wetherspoon's profits buoyed by Guinness boom among...
- Saudi Aramco to pay £100bn dividend to help fund city of...
- MP condemn woke ESG debanking as 'legitimate' firms are...
- Big Four auditors fined £9m for the London Capital &...
- The 10-minute rule that could save you from a parking fine
- Bungalow wars! Downsizers are in bidding battles against...
- Boost for City as BP vows to keep its London listing -...
- Zalando has sporting chance of summer boost after...
- Scottish Widows gave me access to a stranger's £40,000...
- Kier Starmer and Rachel Reeves don't have that 'vision...
- Direct Line customers faced higher prices in the first...
- Minis new electric Cooper SE tested: Can BMW harness the...
- BUSINESS LIVE: Boohoo sales slump; Wetherspoon's lifts...
- Boohoo sales plummet as debts surge