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Shares in Coronation Street broadcaster ITV dropped 2.8p to 49.7p today, after the Competition Commission said it won't scrap advertising rules put in place when Carlton and Granada merged six years ago.
ITV chairman Michael Grade had argued that the rules, which safeguard how much advertisers have to pay for slots on the flagship channel ITV 1 depending on its audience, were out of date given the rise in digital TV and other ways people watch.
Since the so-called contract rights renewal (CRR) system was introduced in 2003, ITV1's share of the TV advertising market has dropped from more than 50% to about 36%.
The Competition Commission said that, while it won't scrap the system, it may tweak it to take into account ITV's digital channels and “unintended effects” it produced.
Analysts are worried a final decision won't come in time for this year's advertising-rate negotiations with big airtime buyers.
Numis Securities says: “The wording of the statement is tougher than we expected at this stage, and indicates that CRR will not be abolished in its entirety.”
It continues to rate the shares a hold to reflect the recent strong performance by the shares this year having trebled from their March lows.
Citigroup describes the outcome of the Competition Commission as “disappointing”, with it making a number of fairly conclusive remarks, but leaving a small possibility of further change.
Shares generally pressed ahead after a slow start as investors marked the first anniversary of the Lehman Brothers collapse which was seen as the tipping point for the banking meltdown and subsequent global recession. Leading shares consolidated their position above the 5000 level in another day of thin trading. The FTSE 100 index posted a rise of 38.82 to 5057.67 as the inflation rate slowed from 1.8% in July to 1.6% in August. This was its lowest since January 2005, but above the 1.4% being forecast in the City.
The early impetus was provided by the miners supported by a rally among raw material prices. Gains were seen in Mexican miner Fresnillo, up 17½p at 740p, and Eurasian Natural Resources, 19½p better at 863p. Oil shares were also back on buyers' lists with Tullow Oil gaining 36p at 1110p, on vague talk of a 2000p a share bid from Italy's ENI, and Cairn Energy, 98p better at 2789p.
Another day and another new major oil discovery for BG Group, up 26p at 1135p. Once again, it has struck it rich in the Santos Basin off Brazil with Abare West. BG has a 30% stake in Abare West, which is operated by Brazil's Petrobras.
Only last week BG and its partners announced a big find in the Guara Field off Brazil with reserves estimated to be worth up to two billion barrels of oil.
Ascent Resources put on 1¼p at 8½p following the result from testing at the PEN-105 well in its Nyírség permits in eastern Hungary. This showed gas reserves and flow rates to be much higher than previously anticipated.
International Power was in poll position on the leaderboard with a rise of 16½p to 305½p. Dealers say this is linked to the sharp rise in the price of natural gas recently. Sentiment has also been boosted by reports that the Chinese Government's investment arm is looking to take a stake in IP's big American rival AED Corporation.
Retailers suffered some of the biggest falls among blue chips. Next lost 43p at 1677p ahead of results tomorrow, while Home Retail fell 10.3p to 283.3p, and Burberry 4½p to 466¾p. Kingfisher also dropped 7p to 200½p after Bernstein cut its rating from outperform to market perform.
Deutsche Bank is the latest to adjust its target price for Marks & Spencer, down 5.6p at 367.9p, to take into account recent outperformance by the shares. It has raised its sights from 315p to 370p.
BT Group advanced 5.7p to 135.5p after Credit Suisse upgraded the shares from neutral to outperform. It believes there is still plenty of scope for cost cutting by the communications group. Credit Suisse has also raised its sights on HSBC from 690p to 720p and repeated its outperform rating. The shares firmed 9½p to 670½p.
Borders & Southern Petroleum rose 4¾p to 53¾p after a line of 8 million shares was said to have been cleared at the 49p level.
