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There were hopes the long-suffering property sector could be on the path to recovery today when Land Securities paid back its debts ahead of plan.
Britain's biggest property group has slashed its debt by £1.5 billion and intends to cut them further this year. Analysts were fans of the move, taking it as a return almost to business as usual for the group. Nomura said that the debt reduction will boost earnings thanks to a pick-up in yields.
It comes just a day after the company sold its 33% stake in Birmingham's Bullring shopping centre for £210 million. LandSecs' shares reversed early losses to trade 1p higher at 687½p in a broadly weaker sector.
A strong performance by commodity stocks pushed shares in London to another intraday high for the year before falling back slightly. The FTSE 100 index rose 31.75 points to 5166.11 while in New York the Dow added 22.52 points to 9801.38.
Kazakh-focused miner Eurasian Natural Resources rose 42½p to 924p, Mexican silver miner Fresnillo surged 26½p to 788½p and Lonmin added 41p to 1740p,
Goldshield, the generic drugs group, fell 11p to 457p as the bid battle fever was cooled by its independent directors. They said Goldshield's management had pitched a buyout in July at a lower level than the 440p a share being offered by its other suitor, AIT Investments, which is backed by former Goldshield boss Ajit Patel and the Fuhrer family who own Israeli pharmaceuticals group NeoPharm. Although the execs are still investigating the possibility of a bid, their proposal has stayed below 440p.
Don't pocket profits from Tullow Oil yet; the shares could double in price. That's the advice of Morgan Stanley, which today said the buy case for the oil and gas explorer has become more compelling thanks to tightening energy markets and the rolling out of its drilling campaign.
Analysts say Tullow's discovery of oil at the Venus well off Sierra Leone last week has reduced the risks from its drilling operations in the region. Morgan Stanley has jacked up its price target for the shares to 1500p, but has upped its bull case to more than £20, resting upon some assumptions about Tullow's operations in west Africa.
The broker optimism sent Tullow's shares 5p higher to 1163p. Japanese broker Nomura also advises snapping up the shares and has today raised its price target from 1160p to 1341p.
The gods of black gold and gas have been kind to Tullow in recent months, with a string of big finds in Sierra Leone and Uganda.
Fears that Severn Trent may have to tap investors for cash left the water giant nursing a loss of 18p at 980p. Evolution Securities said yesterday in a note that Severn could be forced into a cash call thanks to industry regulator Ofwat's plans to limit rises in household bills. The broker reckons this will also lead to a cut in the dividend.
Analysts reckon Sir Stuart Rose should have a smile on his face next Wednesday when Marks & Spencer posts second-quarter results. Shares in the retailer were in demand for a second day as Merrill Lynch advised stocking up, believing that confidence is recovering among older shoppers.
Merrill has upped its price target from 410p to 450p for the shares, saying it expects M&S to say it is continuing to claw clothing customers away from rivals and report a recovery in food sales. Margins should also show signs of stabilisation. Merrill forecasts like-for-like sales will be down 2% for general merchandise and 1% lower for food.
M&S's shares jumped 9¾p to 384¼p.
Trinity Mirror was one of the biggest duds among mid-caps, dropping 5p to 155p after Royal Bank of Scotland advised dumping the stock. The bank warns that the newspaper group's recovery may be more muted than currently forecast given falling circulation at the Mirror and concerns for the health of the regional newspaper industry.
However, it has hiked up its price target from 40p to £1.30, thanks to a lower estimate for its pension deficit and says bosses are doing “an admirable job in difficult circumstances”.
On Aim, shares in Petroceltic hit a three-year high, up 1p at 18¾p, as the oil and gas explorer said it had struck lucky drilling for gas in Algeria. Evolution has upped its price target for the shares from 5p to 11p, but kept a reduce rating.
