Yesterday's trading: Firms gain from Crossrail project
London's Crossrail will stretch from Maidenhead to Shenfield and Abbey Wood, linking Heathrow with Oxford Street and Canary Wharf.
Market watcher: Round up of yesterday's action on the Stock Exchange
The Tories could yet decide to mothball it should they win next year's General Election, but it is due to open in 2017.
The £16bn project will become the biggest construction scheme in the UK and London's first major transport upgrade since the Jubilee Line extension in 1999. It should create 14,000 jobs at its peak and work started on the first station – Canary Wharf – in May.
Many companies will be hoping to benefit from design and construction work. Scott Wilson was notable for a gain of 3.75p to 7.75p after securing a further Crossrail station design contract for work at Paddington Station worth £9.8m. It takes the total value of contracts secured to £37m all of which will be delivered over the next 18 months.
Brewin Dolphin said the new contract should allay investors fears about the group's ability to meet analysts' profit forecasts for the full year. The broker maintains its buy rating and 100p price target on the stock.
Hyder Consulting advanced 11.5p to 180.5p after hearing that it has been awarded two Crossrail station design contracts for Whitechapel and the Victoria Dock Portal, worth £10m and £3m respectively. Brewin Dolphin raised its target price to 190p from 170p.
Dart Group, operator of the Jet2.com lowcost airline based in Leeds, ran into some turbulence and nosedived to 54.25p before closing 7.75p lower at 59.5p. Investors disembarked after Ryanair announced plans to open a new base at Leeds Bradford airport. Some competition!
Renewed profit-taking ahead of today's Bank of England Inflation Report left the Footsie 50.86 points lower at 4,671.34. Wall Street mirrored London's trend, closing 96.50 points down at 9241.45.
Sentiment across the Pond was unsettled by renewed fears about CIT Group's future. Shares of the commercial lender slumped 20% after it warned it may be forced to seek bankruptcy protection if it cannot complete a cash tender offer for $1bn of debt. It also delayed filing its quarterly earnings report.
Lloyds Banking Group remained in the dog-house, closing a further 6.9p down at 90.97p. Selling swelled turnover to 151m as investors ran for the exit amid fears that the part-nationalised bank has plans to roll out a £15bn rights issue to reduce its participation in the government's asset protection scheme. As it did on Monday, Royal Bank of Scotland, majority owned by the Government, retreated 2.5p to 42.8p in sympathy.
Despite Morgan Stanley upgrading to overweight with a 420p price target, Barclays was dragged 12.3p lower to 346.35p by the general trend. The broker advised clients that legacy issues are abating and the bank is positioning itself as a winner as the European and US banking markets consolidate. It has better asset quality than its peers.
Melrose Resources jumped 11.2p to 328.5p after announcing the appraisal well Kaliakra-2 on its Kaliakra discovery in Bulgaria, was successful. It can now add Bulgaria on to its portfolio which already covers Egypt, America and Romania. Oriel upgraded its net asset value to 456p a share from 417p, reflecting the de-risking of reserves in Kaliakra.
There was some fun and games in South African mining minnow Strategic Natural Resources. The shares were sold down to 10p after the company said that it had not held discussions with 10pc shareholder Atlantic Coal (0.025p up at 0.675p) about a possible 15p a share bid. They rallied to finish only 1p easier at 12p after Atlantic Coal then said that it had had two offers rejected by the SNR board.
Atlantic Coal's chairman is Adam Wilson, who helped float Strategic Natural Resources when he worked for stockbroker Hichens Harrison. Atlantic's current primary asset is the Stockton Colliery, an opencast producing mining operation in Pennsylvania.
Serica Energy rose 3.75p to 61.5p following the first production of gas from its Kambuna Field, north Sumatra, in which it holds a 50% working interest. Production is targeted to build a plateau of 40m standard cubic feet per day of dry gas and approximately 4,000 barrels of condensate per day.
Medical food company Provexis climbed 0.375p further to 3.025p on continuing hopes for an imminent transformational deal for its Fruitflow blood circulation product made from tomatoes.
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