Tonight:
5°c
There was no shortage of punters pulling their chequebooks out when veteran property entrepreneurs Raymond Mould, Patrick Vaughan and Humphrey Price came calling.
The trio, best-known for selling Pillar to British Land for £811 million a few years ago, have just raised £225 million in fresh funds so that their latest vehicle, London & Stamford Property (LSP) can beat rivals to the heavily-discounted commercial property that is flooding the market.
LSP chairman Mould said the placing had been "heavily oversubscribed" and word in the City today was that demand exceeded the offering four times over.
The shares were offered at 105p, a discount of 11.6% to last night's closing price of 118.75p. Mould is now hoping to move LSP, which floated on AIM less than two years ago, up to the main market, possibly early next year, and convert it into a Reit (real estate investment company).
The strength of LSP, down 4¾p at 114p, is its founder's long track record. This is the third time in 40 years that Mould & Co have called market.
Before Pillar, the team were into business park development, founding and then selling, Arlington Securities to British Aerospace for £278 million in 1989.
LSP's success in exploiting the recent downturn in commercial property has inspired others to follow suit. Max Property Group, unchanged at 120p, came to the market in May following a £200 million share-raising, but others, such as New RiverRetail, have had to put their IPO plans on hold.
LSP has bought £750 million of real estate assets since floating, including a 50% stake in Sheffield's Meadowhall shopping centre.
At the end of a miserable week for the FTSE 100 which saw it threatening to sink back to 4000, the index of leading shares was on the slide again, down 18.95 points at 4139.75, dragged down by miners and oil majors.
However, two bullish notes from brokers Cazenove and Goldman Sachs sounded a resolutely cheerful note.
Caz reckons the FTSE is trading "well below the bottom of the potential trading range" identified by its arithmetic. It says 4500 to 5500 is about right. It sees "considerable upside" in both cyclicals and defensives and says some sectors, namely telecoms, tobacco and utilities and retailers, housebuilders and oil producers could move about 20% higher. It says current prices envisage almost no improvement in profits, yet the general feeling is that profits will go up by around 20% over the next two-three years.
Meanwhile, Goldman Sachs is sticking with its view that the underlying trend in the equity market is upwards. It cites better credit markets, lower costs (following all the job cuts) and sounder valuations compensating for the weak economic backdrop. Its top picks include pharmaceutical group Shire, down 12.5p at 824.5p, engineer Babcock, up 2.5p at 472p and Game Group, down 0.5p at 136¼p.
Trading was again cautious on Wall Street as investors anxiously waited for the second-quarter corporate earnings season to unfold. The Dow closed up just 4.76 at 8183.70.
Brokers applauded smaller-than-expected losses from Alcoa, but that was not enough to snap investors out of their wary approach. Drugmakers came under the hammer with Merck losing almost 4% at $26.94 amid speculation its new cholesterol treatment scored badly in clinical trials.
Tokyo shares were below their best levels of the day, the Nikkei Average finishing down 3.78 at 9287.28. That was even though exporters clawed back some recent losses as the yen weakened a tad against the dollar.
Investors remain apprehensive about the second-quarter earnings season and various crucial economic indicators. Some retailers of inexpensive items such as clothing chain Fast Retailing rose after booking quarterly profit gains as they found favour with price-conscious consumers.
Hong Kong shares were little changed, but investors shrugged off their concerns over the global economic outlook to pile into new listings. Among these was gas-fired power plant operator Amber Energy, which surged 73% to HK$2.87, easily outstripping its issue price of HK$1.66.
The Hang Seng index was down 28.48 at 17,762.11.
