Market report: Thursday close

This Is Money13 April 2012

THE utilities sector received a shot in the arm today from news of a bid approach for

East Surrey Water

If the deal goes ahead, investors will receive an offer worth 535p a share, including 10p of dividend, which will value the group at £450m. East Surrey is one of the smaller water companies but City speculators say this could signal a series of bids in the sector.

Bristol Water is seen as vulnerable. Its shares jumped 32½p to 672½p while Dee Valley rose 20p to 872½p and Northumbrian Water put on 5¼p to 186¾p. Northumbrian has been tipped to merge with Kelda, the old Yorkshire Water, down 2p at 615½p.

The news from East Surrey coincided with the flotation on Aim of Concateno, a shell company out of the Marwyn stable headed by ex-Mid Kent Water boss Keith Tozzi that promises to target UK water companies. They started life at 115p and raced up to 165p before settling at 142½p.

Share prices generally posted useful gains, partly inspired by a further softening in the oil price and three consecutive days of gains on Wall Street.

But trading conditions in London remained thin and the FTSE 100 index closed up 29.6 at 4977, largely unaffected by the Bank of England monetary policy committee's no-change decision on interest rates today.

Over on Wall Street, indices moved higher as investors focused on a better-than-expected earnings report from Alcoa, while ignoring problems at Wal-Mart and Pfizer. At the London close, the Dow Jones was 36.3 points ahead at 10,522.8.

Prosecutors in the trial of Wembley in the US over alleged bribery attempts at its Lincoln Park casino have handed back $5m (£2.6m) of the $8m the company lodged to cover potential fines. Although its directors face a retrial, the number of charges against Wembley, 2½p down on 780p, have been dropped from more than 16 to six.

Meanwhile, Wembley's takeover by BLB has been delayed by a month while US lawmakers consider tax breaks for the new owner.

Car and cycle accessories retailer Halfords' latest trading update showed like-for-like sales up almost 9%, and the shares rose 3½p to 300p. The news came as a relief to retail analysts, who were concernedby the dramatic slowdown in sales reported by other stores groups.

Former high-flyer Cairn Energy rallied 40p to 1216p even though American brokerage Smith Barney has begun coverage of the shares with a sell/high risk rating and a target price of 1050p.

It warns that the market is 'implicitly over-optimistic' about exploration and appraisal success. 'As exploration-led momentum slows, we see the focus turning to project economics and the adoption of more conservative valuations,' it says. Last year Cairn surged from just under 400p to a peak of 1570p.

Jet charter broker Air Partner doubled half-year profits to £1.2m but admitted that a lot of its new business had been one-offs. The shares lifted 7½p to 550p.

Car entertainment specialist Armour firmed 4½p to 67p after it said interim pre-tax profits grew from £1.33m to £1.39m.

It was the first day of trading on Aim for telecom solutions provider Leadcom Integrated Solutions following a placing by broker Corporate Synergy at 32p. The shares opened at 34½p and closed at 37¼.

FDM also made its debut on Aim after a placing by Noble at 78p. Shares in the Sussex-based information technology provider ended the day at 83½p.

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