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FTSE in-depth: Olympics power Aggreko surge

By Geoff Foster for MailOnline
Updated: 03:36 EDT, 27 January 2011

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On your marks, get set, go! Buyers piled into shares of temporary power group Aggreko helping them surge to 1498p before they closed 75p higher at 1487p on hearing that it has been appointed by the London Organising Committee of the Olympic Games and Paralympic Games to be the exclusive supplier of temporary energy services for London 2012.

Geoff Foster: President Obama's upbeat annual State of the Union address struck a bullish chord in London.

Aggreko will provide power across 39 venues in seven different locations - London, Cardiff, Coventry, Glasgow, Manchester, Newcastle and Weymouth.

It will be provided by generators located at each venue distributed through more than 1,000 kilometres of cable and 3,500 distribution panels.

Aggreko successfully supplied power to the Beijing Olympics in 2008, the Vancouver Winter Olympics in 2010 and the World Cup in South Africa last year.

Chief executive Rupert Soames said yesterday: 'We normally play away from home so it is therefore enormously exciting to have the opportunity to perform in front of our home crowd.'

The group's fourth-quarter trading performance beat analysts' expectations and Goldman Sachs yesterday advised clients to buy the stock.

The US broker believes it has 'powerful potential' and will benefit from structural growth in its profitable International Power Projects business, as power shortages in developing companies drive further demand for temporary power.

President Obama's upbeat annual State of the Union address which saw him pledge to create jobs and spur growth in the world's biggest economy struck a bullish chord in London.

The Footsie jumped 86 points at the outset to trade above 6,000 again before retreating on profit-taking to finish 51.5 points better at 5969.21.

The FTSE 250 advanced 112 points to 11,613.6. News that two 'hawks' at the Bank of England, David Sentance and Martin Weale, had called for a rise in UK interest rates earlier this month was ignored by the market and even ridiculed in places.

David Buik, market guru at BGC Partners, said: 'They are now entering "lulu-land" if they cannot see that any hike in rates will throttle recovery - inflation or no inflation.'

Wall Street traded above 12,000 for the first time since June 2008 in early trading following Obama's comments and ahead of the Federal Open Market Committee's decision on US interest rates.

Revived takeover gossip helped broadband internet provider Talk Talk shrug off news of 580 job losses and an Espirito Santo sell recommendation to close 4.6p better at 160.6p.

Espirito, which incorporates Execution Noble believes that TalkTalk's YouView TV product will not act as a builder of market share and may not attract the number of subscribers the market expects. It is likely to continue to lose market share, particularly to Sky.

Persistent small selling dragged Afren 4.7p lower to 143.8p. The company said that average oil production in 2010 averaged 14,320 barrels of oil per day, which was slightly below analysts' expectations. Production guidance for 2011 has now been downgraded to 40,000 of barrels of oil per day down from 50,000.

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Gold miner Centamin Egypt, which has collapsed 22% so far this month on worries about Tunisian contagion and demonstrations taking place in Egypt, was sold down further to 129p before buyers reappeared on the back of bullish comments from Canaccord Genuity. The close was 2.3p cheaper at 136.4p.

The broker advised clients to buy into this quality gold company ahead of an analysts' site visit next week.

Profit-taking left Mears Group 7.25p easier at 315p but Execution Noble has upgraded to buy from hold and raised its target price to 390p from 310p. The broker says it is now the leading provider of social housing reactive repairs, entering 2011 with unchanged structural growth drivers and unprecedented levels of visibility.

More than 65m shares of Nostra Terra Oil & Gas changed hands and the close was 0.075p dearer at 0.58p. Matt Lofrgran, chief executive, last week bought 1.5m shares at 0.415p and chairman Sir Adrian Blennerhassett 580,000 shares at 0.42p per share. Dealers now hear that a bullish drilling report on its prospect in Texas is imminent.

Vague private equity takeover chatter brought about a 10.1p gain to 141p in Spirent Communications. Numis upgraded the telecoms testing company to buy from add and maintained its 180p price target.

Despite reporting that trading for the year to end December 2010 was in line with market expectations, StatPro eased 0.5p to 115.5p. The provider of portfolio analysis to the global fund management industry will report annual results on March 23.

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