Yesterday's trading: Another downer for battered LSE
Gossip that a heavyweight replacement has been found for London Stock Exchange boss Dame Clara Furse, who steps down this year after more than eight years at the helm, saw the shares make early progress.
Clara Furse: The LSE is looking for a new boss
But the upbeat mood soon changed when dealers caught a look at a bearish Credit Suisse note and heard that a major trading rival had launched a new price war by slashing fees for the second time in a couple of months. The close was 26p down at 480p.
Speculation suggested that Bob Wigley, the former Merrill Lynch banker, has been lined up to replace Furse.
Should his appointment be confirmed it would probably be well received as he is one of the best known names in the City. He stood down from Merrills in December after its takeover by Bank of America.
Furse will forever be remembered for rejecting takeover bids from Australian investment group Macquarie, America's Nasdaq and Deutsche Bourse of Germany.
The shares soared to almost £20 after Nasdaq abandoned its 1243p a share bid on August 2007 and then sold on its stake at a fancy price.
The Dubai Bourse paid £14 a share for its 20% and the Qatar Investment Authority £16 a share for its 15%. They are now both sitting on hefty paper losses.
The LSE has crashed 75% from its peak of 1979p along with the wider market and amid growing competition fears. Turquoise, the rival trading platform which now commands a 5% market share in the most liquid stocks across 10 European markets, yesterday cut its fees yet again. Under a tariff structure, it will charge a trading spread of 0.06 basis points, which makes it the lowest cost destination for European equity trading.
Meanwhile, Credit Suisse cut its LSE target price to 460p from 495p because of weak volumes. The broker expects a 60% decline in the value traded on LSE's UK stocks in January and a 30% fall for the value traded on the LSE's UK order book in the next 12 months. It reckons market expectations do not fully discount the scope for lower listings activity, depressed trading volumes and a decline in the number of real-time terminals.
Financials elsewhere staged a dramatic recovery after beleaguered Barclays ended a disastrous nine-day slump by reassuring the market that it is well funded and profitable. It will also be bringing its preliminary results forward to February 9. A classic bear squeeze ensued which saw the shares rally a stonking 37½p, or 73%, to 88.7p.
The sector's strong recovery galvanised the Footsie, which soared 156.54 points to 4,209.01, while the FTSE 250 jumped 168 points to 6,256.22. Wall Street helped by rising 154 points at the outset, excited by drug giant Pfizer's £49bn cash and shares offer for Wyeth. Dealers hope the deal might just signal that other industries may now have some leeway to begin making acquisitions of their own.
Other banks were dragged higher by Barclays. Lloyds Banking Group bounced 15.9p to 65.2p and Royal Bank of Scotland 2.4p to 14½p. An Evolution recommendation lifted HSBC 25½p to 541p. The broker expects HSBC to maintain its dividend, but believes the market has already factored a 50% dividend cut in the share price.
SHARES ADVICE & TOOLS
null
Insurers shrugged off fund-raising fears with Prudential 29¾p better at 318¼p. Legal & General, with fourth-quarter figures due on Thursday, closed 4.1p dearer at 59½p.
Fund manager Henderson Group gained 13p to 63½p after Altium Securities upgraded to hold from sell. It reckons a possible acquisition of New Star Asset Management (0.01 off at 1.98p) would be taken positively as it would be earnings enhancing.
Punters piled into Polo Resources on news of an unsolicited, non-binding, indicative and highly conditional approach from Denham Commodity Partners Fund. The shares closed 0.7p up at 2.875p on turnover of 19.3m shares.
Taking into consideration Polo's £55m cash in the bank, its 26.3% stake in Caledon Resources (¼p easier at 24½p) and its 29.8% shareholding in GCM Resources (2p up at 40½p), its net asset value is more than 4p a share. Dealers should also hear soon about an exciting joint venture partnership deal Polo has signed with an industry major for its Mongolian coal interests.
ANT, which provides software and services for the delivery of digital TV, added 3p at 2½p. Results for the year to end-December 2008 will exceed market expectations. A positive trading statement also left AT Communications 1¾p up at 14¼p.
Most watched Money videos
- Land Rover unveil newest all-electric Range Rover SUV
- A look inside the new Ineos Quartermaster off-road pickup truck
- BMW meets Swarovski and releases BMW i7 Crystal Headlights Iconic Glow
- MailOnline asks Lexie Limitless 5 quick fire EV road trip questions
- 'Now even better': Nissan Qashqai gets a facelift for 2024 version
- Tesla unveils new Model 3 Performance - it's the fastest ever!
- 2025 Aston Martin DBX707: More luxury but comes with a higher price
- Mini celebrates the release of brand new all-electric car Mini Aceman
- Mail Online takes a tour of Gatwick's modern EV charging station
- Leapmotor T03 is set to become Britain's cheapest EV from 2025
- Blue Whale fund manager on the best of the Magnificent 7
- Mercedes has finally unveiled its new electric G-Class
- Revealed: The investments that will really make a holiday...
- BUSINESS LIVE: Ryanair profits soar; AstraZeneca builds...
- RUTH SUNDERLAND: Stop cynical Royal Mail bid
- Cadbury owner Mondelez to face scrutiny over selling...
- Ryanair profits soar to record high of almost €2bn
- Who would qualify for a £100 Nationwide loyalty bonus...
- Britain's new bonkers EV: Callum Skye is an £80k electric...
- Australian miner looking to buy Anglo American set to...
- I was 'brokefished' by my friend for £400 - can I salvage...
- AstraZeneca to construct $1.5bn cancer drugs facility in...
- British Land sells stake in Sheffield's Meadowhall...
- Top industrialist Sir Jim Ratcliffe blames high taxes for...
- Victoria Plumbing buys arch rival Victoria Plum in £22.5m...
- Keywords Studios eyes £2.2bn takeover by Swedish private...
- Where it REALLY pays to own a holiday let - how to turn a...
- CITY WHISPERS: Boss Cook-ing up a big sparkler to woo De...
- St James's Place facing humiliating exit from FTSE 100
- Sales at Bloomsbury soar thanks to the craze for...