Hammerson rises on property sale hopes

Property group Hammerson has climbed 19.5p to 397p on hopes it may succeed in selling some of its assets and thus avoid a cash call.

The whole real estate sector has been in the doldrums in recent days as investors feared the prospect of a host of rights issues from debt-laden companies. But a report today suggests that Hammerson's Bishops Square development in the City of London could be sold for up to £470m, which would go some way to easing the pressure on its finances. Analysts at Credit Suisse said:

"A bid [of] around £470m would equate to a 7.25% yield for the City property. [Financial group] Evans Randall is in pole position. However several other parties have expressed serious talks with Hammerson. Other interested parties include sovereign wealth funds, and [fund manager] Moorfield. One of the most attractive parts of the deal is that Hammerson can transfer the debt secured on the property to the purchaser - however new terms may need to be negotiated.

" Any transaction over £100m in this market is a positive. If Hammerson can exchange on this transaction this would alleviate concerns regarding rights issues. This also provides support for other City players including British Land as the evidence provides valuation evidence for valuers. We stress that the property is not under offer but indicative bids show that there is market for well-let properties, even in the City."

British Land, which reports figures next week and is said to be examining all options to bolster its balance sheet, was also wanted, up 23.75p to 454.5p.

Credit Suisse also helped push the banking sector higher, saying UK banks could be near the bottom of their share price falls. It said:

"The markets are becoming less sensitive to the performance of banks. This suggests to us that investors realise we are approaching the end game for banks whereby government policy stabilises the banking system, making it both solvent and liquid at the expense of minority shareholders."

Royal Bank of Scotland rose 2p to 24p, Barclays was 4.8p better at 104.8p ahead of results due on Monday and Lloyds Banking Group ended 7.4p higher at 108p.

Overall the FTSE 100 added 62.94 points to 4291.87, helped by a strong opening rise on Wall Street. A 175 point gain on the Dow Jones Industrial Average by the time London closed came despite worse than expected US unemployment figures. Traders said the grim job numbers put more pressure on US politicians to pass President Obama's $937bn stimulus package to boost the American economy.

Miners moved higher on the back of firmer metals prices, with Antofagasta adding 19.25p to 498.75p, BHP Billiton 50p better at £13.35 and Rio Tinto rising 120p to £19.57.

InterContinental Hotels climbed 41.5p to 559p after positive notes from Royal Bank of Scotland and Credit Suisse. RBS issued a buy note with a 770p target while Credit Suisse raised its recommendation on the company from neutral to outperform.

Supermarket group Tesco rose 7.9p to 373.2p despite analysts at JP Morgan issuing an underweight rating and a 300p price target. The bank said:

"Tesco has a price problem in our view, and this price problem stems from its strategy of customer segmentation, range flexing and own-label tiering within a single-brand, multi-format business. We believe the business will only regain traction in the UK market when it lowers the basket price to customers: no pain, no gain."

Lower down the market, electric car maker Tanfield accelerated 1.33p to 7.73p after a positive update, while Accsys Technologies - which specialises in environmentally friendly and sustainable wood products - dipped 0.08 cents to €1.32 despite a round of City presentations by chairman Willy Paterson-Brown and hopes of new licensing announcements. It has licensing arrangements in China, the Middle East and North America, and distribution deals in Europe including the UK. It is currently talking to possible new licensees on five continents, and is keen to announce further deals by the time of its year end on March 31.The City would like to see more licences in North America and Europe, and these are the areas where the company is believed to be concentrating its efforts.