FTSE in-depth: Now Investec's in the firing line

By Geoff Foster for MailOnline
Updated: 03:12 EDT, 4 August 2010

Barely a week goes by without investor group PIRC having a moan about something or other.

Geoff Foster: The Footsie paused for breath after Monday's 2% leap

South African specialist bank and fund manager Investec is its latest target, with the activist group urging shareholders to oppose the election of a number of nonexecutives at next Monday's AGM in the City of London.

It goes without saying that it is recommending opposition to the board's remuneration report too.

PIRC points out that there is a complete lack of independent representation on the Investec board. It's like an old boys club, it says. The board is full of South Africans who have known each other for donkey's years.

Samuel Abrahams is not considered independent as he has been on the board for 13 years, while Ian Kantor is not only a former chief executive but is also the brother of the managing director and has also been on the board for more than 30 years.

Richard Thomas has been on the board for more than 29 years, and Fani Titi was previously the chairman of Tiso Group, which has a material relationship with Investec.

Bradley Field was previously the chief executive of Investec Bank and an employee of Investec. All very cosy.

Investec's shares slumped 28.3p to 475.2p as dealers heard about a further placing of 22m shares at 475p a share to institutional investors. The proceeds of the fundraising are to be used to take advantage of opportunities in credit markets.

JP Morgan was unimpressed and reminded investors that Investec raised £85.8m before expenses in July 2009. The proceeds were then used to purchase its own debt.

Microchip manufacturer ARM lost 19.9p to 311.9p after chief executive Warren East sold 140,000 shares at 321.03p a share and Tim Score, finance director, unloaded 200,000 shares at 316.759 a share.

Bears also fed on an off-the-wall rumour that US giant Apple is about to drop ARM as a customer. Apple is ARM's biggest client and pays royalties for ARM's chip designs used in its products. Only a month ago punters had chased the stock sharply higher on talk of a possible bid from Apple.

The Footsie paused for breath after Monday's 2% leap as some fund managers decided to trouser profits. But after falling 40 points or so, prices rallied and the close was only 0.63 points off at 5,396.48.

The Street of Dreams lost 30 points in the early stages following disappointing earnings reports from Dow Chemicals and Procter & Gamble.

Responding to a Goldman Sachs recommendation and target price of 434p, Centrica added 11.1p at 320.9p.

International bank Standard Chartered jumped 41p to 1,902p on hopes it will today emulate HSBC's excellent interims. In June's pre-close trading statement, the bank said that 'it was tracking towards another strong performance in the first-half of 2010'.

Continuing US bid speculation lifted hedge fund manager Man Group 4.3p to 227.4p.

Drugs giant Shire put on 19p to 1474p as analysts gave the thumbs up to its £355m acquisition of gastrointestinal company Movetis. The deal will be funded out of current cash resources and Shire expects the acquisition to be earnings enhancing after 2012. Morgan Stanley's target price is £16.

After Terry Smith puffed up the chances of his inter- dealer broking firm attracting another predator, shares of Tullet Prebon jumped 18.9p to 378.4p. Panmure Gordon lifted its target price to 450p from 430p.

More than 4m shares in Falklands explorer Borders & Southern changed hands as they touched 79.5p before closing 3.25p better at 76.75p. Rumours of a pending drilling report did the rounds.

Circle Oil gushed 1.25p to 33.25p following a placing of 141.7m shares at 30p a share with existing and new investors. The £40.6m raised will accelerate the company's exploration activities in Morocco, Tunisia, Oman and Egypt. Killik added a 1pc interest to its Special Situations portfolio and says that management's production target of 10,000 barrels of oil equivalent per day over the next three years is a credible one.

Rambler Metals & Mining added 2p at 30p after entering into a Toll Processing agreement with Tenacity Gold Mining. Tenacity will deliver ore for processing from its Deer Cove and Stog'er Tight Gold Mines to Rambler's Nugget Pond mill which is located within 30 miles of these deposits.

A bullish Edison research note attracted buyers to Ariana Resources, 0.38p dearer at 2.88p