Morning:
6°c
Unilever today stood out with a rise of 22p to 1314p. Friday's issue of a £350 million corporate bond at par and yielding 3.9%, redeemable in 2014, by the Knorr soup and Lipton tea group was quickly gobbled up. In fact, it was heavily oversubscribed, and the stock was today trading at £100.30.
Some applicants say they got about 7% of the stock they applied for while others received nothing. It is claimed some of the City's biggest institutional investors had been allocated the stock ahead of issue. This would indicate that demand for bonds remains high, making last week's rally by share prices all the more puzzling.
Stock-market bears were continuing to feel the squeeze in London today as shares climbed back above 3800. The FTSE 100 index rose 95.28 points to 3848.96, stretching its gain to 318 points or 9% in a week. Wall Street also extended its gains this afternoon. The Dow rose 100.27 to 7324.25 despite a bigger-than-expected drop in industrial production last month.
Increased optimism about the banking sector has improved London sentiment, although most traders agree this is likely to turn out to be a dead-cat bounce.
Barclays rose 16.4p to 90.5p after confirming plans to sell part of its fund-management business. The deal is expected to fetch the lender £4 billion, which will be used to strengthen its balance sheet.
The insurers were also chased higher, Prudential putting on 16¾p at 277½p. Hedge-fund operator Man Group firmed 1.3p to 194.3p but UBS dropped its target from 186p to 165p to reflect lower assets under management.
The shorts continue to cover their positions in Land Securities in the wake of the property developer's £755 million rights issue, with the shares climbing a further 20½p to 391p. That, in turn, drove up the nil-paid 17½p at 103p.
The bargain-hunters came in for Marks & Spencer, 10½p better at 256¾p. JPMorgan has tweaked its target 10p higher to 310p after seeing an improvement in the retailer's food business.
National Grid advanced 21p to 575p. Morgan Stanley has scuppered suggestions the group needs a rights issue and reckons the shares have been oversold.
Anglo American put on 35p at 1150p despite Goldman Sachs dropping its rating on the shares from buy to neutral and slashing its target from 1196p to 1143p. The broker reckons metal prices may fall further.
Evolution Securities continues to rate Rio Tinto, up 7p at 2084p, a sell, and cannot see any benefit to shareholders from the Chinalco fund-raising. It has raised its target from 1180p to 1640p.
Cazenove has lifted its rating for Arm Holdings, ¾p better at 104¼p, from in-line to outperform, and says it has confidence the group can cut costs.
On AIM, Victoria Oil & Gas jumped 1.82p to 4.5p. The Kazakh general prosecutor has supported it in a dispute over its ownership of the Kemerkol oil field.
