Fags' Footsie hopes likely to fall flat

SO NEAR, yet so far.

Antofagasta

A Numis recommendation and lifting of its target price to 877p from 777p helped the stock, affectionately known as 'Fags', to firm a further 5p to 640p. But at £1.26bn, its market value will not guarantee admission to the big boys' league.

Fags has soared from 158p in 1999, and recently touched a peak of 668p. Numis believes the potential sale of 33.6%-owned Quinenco, a diversified industrial services group in Chile, could be worth 70p a share.

The broker expects the copper price to keep rising. Strong demand from China, producer discipline and falling output at some major mines has caused London Metal Exchange inventories to fall. Fags is planning a £186m investment to extend the life of its main Los Palambres mine, one of the three biggest copper deposits in the world.

Insurer Royal & SunAlliance (4p off at 140p) and aero engine-maker Rolls-Royce (1p dearer at 132p) are favourites to return to the Footsie. RSA has cut debts again with the £72m sale of its US surplus lines operation to Alleghany Insurance and the sale of its Puerto Rican operations for £38m.

Both have market values in excess of £2bn and will probably replace services group Hays ( 1/4p easier at 91 1/4p) and former Bass pubs group Mitchells & Butlers (4 1/4p lower at 215p).

Gordon Brown's message that Britain will not yet be signing up to the euro left the FTSE 100 21.7 points lower at 4129.1.

Mobile phone giant Motorola's shock profits warning caused more of a stir and left Wall Street nursing an opening fall. Vodafone eased 1 3/4p to 126 3/4p.

Ahead of an expected move on struggling rival Cordiant, Sir Martin Sorrell's advertising giant WPP eased 9 3/4p to 503 3/4p. Cordiant fell 1 3/4p to 5 1/4p on expectations that WPP will bid only up to 3p-a-share cash. Cordiant sold its 77.3% - owned Scholz & Friends business in Germany for £15.8m. Broker Arbuthnot still says sell - there remains a great risk that shareholders will be unable to realise more than the current market value.

Life insurer Britannic Group touched 247 1/2p before closing 8p better at 234p on revived talks of a 250p cash offer from Old Mutual, 3/4p dearer at 88 3/4p.

Hazard warning lights flashed at bus and coach-maker Henlys after a shock profits warning. The close was 46p lower at 64p after it said full-year profits will be substantially below forecasts. Analysts were flabbergasted by the scale of the internal problems that have emerged since March at its main bus plant in North Georgia. Swingeing downgrades are just around the corner. Selling amid rumours of a £60m pension hole left logistics group Christian Salvesen 4p down at 53p.

Aim-listed Medical Marketing more than doubled to 14.37p after a joint venture agreement with two London colleges to develop a new treatment for HIV.

A Seymour Pierce recommendation after a third discovery at its Mansouriya well in Egypt helped Melrose Resources gush 15p to 80p.

Consultancy Bede jumped 5 1/2p to 20 1/2p after winning three orders for its advanced D1 X-ray tool from Taiwan. Better-than- expected full-year figures and upbeat remarks about current trading helped Hyder Consulting gain 16p to 85 1/2p. Good figures left media group Creston 12p up at 72 1/2p. Institutional buying lifted bars and nightclubs group Urbium 1/2p higher to 6 1/8p.

Asset sales worth £800,000 left leisure group Springwood 3p off at 21p. Reflecting the recent improvement in stock market activity, broker W H Ireland rose 8 1/2p to 42 1/2p.

Canary Wharf surged 12p to 275p, valuing it at £1.6bn, after adviser and tenant Morgan Stanley confirmed its interest. The bank's property fund is 'very advanced' on an offer and wants to work with management.

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