Saturday 6th August, 2005
London shares falter on US interest rate fears
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Financial
Times Friday 5th August, 2005
Solid gains in early trade evaporated on
Friday as the FTSE was hit by fears of US rate hikes.
The benchmark FTSE
100 finished 0.8 points lower at 5,314.7, despite being 26 points higher halfway
through the session.
The culprit was stronger-than-expected US jobs growth
in July raised fears the Fed will continue to lift interest rates to keep inflation
at bay.
The mid cap FTSE 250 index was 5.1 points softer at 7,680.5. Volume
was a relatively light 2.5bn shares.
Nevertheless, the benchmark index could
look back on a solid week. Over the five days, the FTSE rose 0.6 per cent while
the mid cap 250 index was 1 per cent stronger.
Barclays, the banking group,
rose 3 per cent at 576p after its first half results were far better than consensus
expectations.
Although he rated the stock as an ‘underperform’,
Michael Helsby, an analyst at Fox-Pitt, Kelton, said it would be churlish not
to recognise a good set of results.
“After disappointing figures from
Royal Bank of Scotland on Thursday, the market is relieved about today’s
showing,” he said. However, he remained worried about the extent of sub-prime
lending, the now-high expectations for Barclays Capital and the retail bank would
not be able to cut costs as much in the second half of the year.
ITV rose
1.3 per cent to 119¼p on fresh takeover speculation following US billionaire
investor Haim Saban’s exit from his 50 per cent stake in German satellite
company Pro-Sieben on Thursday. Saban was rumoured to have been interested in
buying both Carlton and Granada prior to the duo’s merger to form ITV in
2003.
Aegis rose 9.6 per cent to 126¼p on speculation of a takeover
following news that Groupe Bollore had taken a 6.03 per cent share in the advertiser.
Vincent Bollore, who heads the French investment company, also owns a 22 per cent
stake in French advertising group Havas, which caused traders to link the two
together.
Europe’s second largest airline, British Airways, slipped
1.5 per cent to 286p on profit-taking after it said first quarter pre-tax profits
jumped 65 per cent, ahead of market expectations, helped by growing volumes of
more lucrative premium passengers.
Fellow airline EasyJet added 5.7 per
cent to 265¼p after it reported July passenger traffic up 18 per cent and
a passenger load factor of 88.4 per cent.
International Power rose 2.1
per cent to 225¼p after Citigroup raised its target price to 250p from
210p in the way of the utility’s strong first half results.
Floors2Go,
the flooring retailer, added 9.1 per cent to 33p on talk of takeover rumours.
The company put out a statement denying it knew of a reason for the share price
rise. Nevertheless, investors still felt there was something to the rumours, and
one investor bought 300,000 shares at 40p even after the Floors2Go statement.
Ark
Therapeutics rose 3.9 per cent to 96¾p as it said it had dicovered a novel
gene therapy delivery technology which selectively inserts DNA into the specific
therapeutic site in the genome.
IP2IPO Group, the intellectual property
group, gained 0.9 per cent to 570p as it announced its latest investment. It invested
£350,000 for a stake of 33% in ACSIAN, a spin-out from the University of
Southampton. ACSIAN develops software for the optimal planning and execution of
complex projects where budget overruns are frequent and widely publicised.
Catalyst
Media Group, the video content provider, returned to trading on AIM after a hiatus
of nearly nine months as it finally concluded negotiations for the acquisition
of Alternateport from United Business Media a year after first announcing plans
to buy it. However, shares dropped 38.7 per cent to 4¾p as interim results
doubled.
Catalyst Media said it would partly pay for Aternateport, whose
sole asset is a 20 per cent stake in Satellite Information Services, with a placing
of 425,000 shares at 4p each.
Formjet, the licenced software vendor, plunged
43.2 per cent to 3.62p as it warned that turnover did not meet expectations, and
consequently forecast a first half pre-tax loss.
InTechnology dropped 20
per cent to 36p after forecasting lower than expected earnings, citing pricing
pressure and dollar appreciation.
European Diamonds dropped 30.7 per cent
to 24¼p as the group reported the first diamond sales from its Liqhobong
mine in Finland had been delayed until November. It also said it was searching
for more potential sources of funding after a private placement programme was
halted.
Laura Ashley rose 7.8 pe cent to 13¾p, on talk the fashion
and furnishings retailer may be taken private.
Neteller, an online payment
group, lost 4.4 per cent to 851p amid rumours that a potential venture with the
Bank of Scotland had collapsed.
