Market report: Tuesday close
IT has been a tough time of late for
The shares rallied 6¾p to 242p today, one of the better-performing second-liners, as Lehman Brothers raised it from underweight to overweight and hoisted its 12-month target from 259p to 322p. This follows a similar move yesterday by Credit Suisse First Boston, which moved from underperform to neutral, saying last month's profits warning was now reflected in the share price.
That view is echoed by Lehman, which points out the price is now at a 15% discount to the rest of the sector and fails to reflect the benefits of the group's discounted cashflow. The US broker reckons that, as digital sales grow and the global market stabilises, the City will look to EMI's potential growth again. It believes competing sales of DVDs will slow this year, helping music sales stabilise further.
Share prices generally were sluggish, a performance mirrored by the Dow in New York this afternoon. London's FTSE 100 index was down 16.3 at 5010.9.
The world's biggest mining company, BHP Billiton, lost 9½p to 740p after delivering a knockout blow to win control of Aussie miner WMC Resources. The higher offer sees BHP pull the rug from under Swiss-based mining outfit Xstrata, up 21p at 1061p, which was offering almost £3.5bn. City speculators say Xstrata may now turn its sights on Lonmin, up 1½p at 1037½p.
Takeover target Somerfield firmed ¾p to 187½p as the supermarkets group awaited the next move of Icelandic bidder Baugur. Financial services provider Cantor Fitzgerald appears to be doing a roaring trade in contracts for difference among speculators betting on the outcome. Cantor now holds 34.7m shares, or 6.35% of the company, presumably a hedge against the CFDs.
The recent slowdown in sales highlighted by Boots continues to vex brokers. US investment bank JP Morgan has repeated its underweight rating with a fair value of 600p, which is not much fun when they are already trading unchanged at 627p. After a meeting with the company, it has chosen to cut its earnings forecast for next year by another 6%.
Jewellery chain Signet firmed ½p
to 110½p after a line of 10.1m shares went through at 110p.
GlaxoSmithKline retreated 4p to 1269p after giving 'unchanged guidance' on prospects for the remainder of the year.
Brokers say a lot will depend on the favourable outcome of the dispute with the US Food and Drug Administration over its depression treatment Paxil CR.
Rival Acambis fell 7¾p to 268p after delaying indefinitely the regulatory filing for its yellow-fever treatment Arilvax because of problems at the manufacturing plant in Liverpool.
It was the first day of trading on Aim for Commoditrade, a shell company set up to acquire firms dealing in various commodities.
The shares were placed by broker Walker, Crips, Weddle, Beck at 5.5p and traded at 9.5p.
Office services group Regus was nudging back towards its three-and-a-half-year high of 109p with a rise of 3¼p to 106p. Man Financial, Britain's biggest hedge fund operator, owns 48.3m shares, or almost 5% of the company.
