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Signs that the US economy is in healthy shape, together with another bout of bid speculation for airports operator BAA, ensured a sparkling end to the week for Britain's leading shares yesterday. After spending most of the day in the doldrums, stronger-than-expected jobs data from across the Atlantic saw the FTSE 100 romp ahead by 52 points to 5,907.9, the first time it has closed above the 5,900 level since 2001.
There was some late excitement with Nasdaq's unexpected £2.4bn, 950p-a-share cash bid for the London Stock Exchange, up 15p to 880p. Although the Nasdaq offer is significantly higher than the 580p Macquarie bid, the Stock Exchange was unimpressed, immediately rejecting the offer as "significantly undervaluing" its business.
Late excitement apart, it was a generally lacklustre day, with little in the way of blue chip news to keep dealers engaged. Trading volumes were a miserable 2.7bn shares.
So it was left to the newcomers to provide some excitement - and property website Rightmove proved well named as it made a sparkling stock market debut, roaring to a 20% premium at one stage, at 397p, valuing the company at more than £500m. The price range had already been raised because of huge demand for the 22.7m shares on offer but the float was still as much as 35 times over-subscribed. There was a mad scramble when trading opened, and although the price later fell back, they still ended the day at 392.25p, a 17% premium to the issue price.
A slightly less spectacular, but still healthy, debut was made by research firm Ovum, which saw its shares score a premium of 8.6% as they rose from their issue price of 190p to 206.5p, valuing the company at just under £25m. The group, which also offers consultancy services, has clients including IBM, Vodafone and Hewlett Packard.
Back among the FTSE 100, crisis-torn Vodafone ended a traumatic week 0.5p higher on the day, and a net 3.5p up on the week, at 124.5p. On Wednesday embattled chief executive Arun Sarin moved to tighten his grip on the telecoms group by removing the last of the old guard, marketing chief Peter Bamford. There remains a question mark over the position of chairman Lord MacLaurin, who is currently touring facilities at Vodafone's joint venture in South Africa.
The normally reliable Greggs, Britain's biggest high-street baker, shocked followers with a grim profits warning, sending its top-heavy shares down almost 12%, to £45.53. As well as facing stiffer competition from the likes of the Subway sandwiches chain and the supermarkets, Greggs is also looking at a £5m additional hit from higher energy prices this year, a cost it is unlikely to be able to pass on to customers.
As if to prove a point, a few hours later energy group npower, owned by the German utility RWE, announced it was raising its electricity prices by 13.4% and gas by 15%. The company, Britain's biggest electricity supplier with six million customers, blamed high wholesale prices. It is the second rise it has imposed on customers this year.
Elsewhere among the leaders, AstraZeneca gained another 41p to close at £28.79 despite talk of an offer from rival drugs group Novartis of Switzerland dying down. Kingfisher was off 3.75p to 231p amid continued worries about trading at its B&Q DIY chain and reports that it has been trying to sub-let space in some of its stores and pull out of others. Its busiest time of the year, Easter, is just weeks away and there are little signs of any improvement in market conditions.
Burberry, down 15p to 453.5p, was weak as analysts at Merrill Lynch warned the price may have run too far ahead of the arrival of its new chief executive, Angela Ahrendts, who is replacing Rose Marie Bravo in May. But Merrill Lynch is keeping its target at 490p.
Lloyd's insurer Amlin, which covers risks from super-yachts to spacecraft, turned in a better-than-expected 51% profits jump, as investment gains offset its sizeable bill for the US hurricanes. Panmure Gordon's insurance analyst Robin Savage was impressed, describing the results as "extremely good." He is maintaining his forecasts. Shares rose 10p to 280.5p.
BMW sold another block of shares in jet engine-maker Rolls-Royce, which closed up 7p at 447p, having earlier seen double-digit gains. The German company sold 8.5m shares, or 0.48% of its stake. Since February it has cut its holding from more than 9% to 2.7%.
Among the smaller caps, entertainment group IP Live stood out with a 4.5p gain to 64.5p as it said the huge success of Billy Elliot, The Musical will see its profits for the year to end March "significantly exceed" market expectations. IP Live made a £500,000 investment in the stage show last June and, once its investment is recouped from net receipts, it takes a share in the musical's profits.
Ringprop, on the other hand, was thrashed for its warning on Thursday, crashing 19p to 31.5p. The marine technology and propellers company warned it does not expect to make any meaningful sales this year and, in an effort to cut overheads, has put its finance director on part-time working. It is also cutting the notice period of its non-executive directors to just 30 days.
BAA ascent path
On Thursday, the airports operator BAA suffered its worst day since the 9/11 terrorist attacks, tumbling 55.5p on fears that the Spanish stalker Ferrovial had lost interest. Yesterday, the shares bounced back 39p to 803p as the market convinced itself that the bid is back on. According to the Spanish website Elconfidencial, Ferrovial has secured £10bn of financing for an offer and may be in a position to go to the BAA board next week, four weeks after making its interest known. The financing syndicate is being led by Royal Bank of Scotland, according to the web report, along with Citigroup, which is advising the Spanish construction company. While a firm offer is unlikely until due diligence can be carried out, shareholders should sit tight and await further action.
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