Aug. 28–City investors were struggling to hold the market above the 4200 level as prices traded in a narrow band.
Buyers were thin on the ground as support levels were tested with the FTSE 100 index trading up 10 points at 4216.4. There was little inspiration from Wall Street overnight, which saw the Dow close with small losses.
Fourth-quarter earnings from recently merged BHP Billiton, up 534 pence at 409 1/4 pence, jumped 75 percent, but the mining giant posted a modest 2.9 percent increase in full-year net profit of US$1.866 billion (UKpound 1.187 billion). London and Sydney-listed BHP blamed “weak” and “anaemic” global demand for the flat result, which was struck on a 15 percent increase in turnover to $117.5 billion. This was due to higher volume sales of iron ore, coal, copper, and aluminium.
Profits after exceptional items and discontinued operations came in at $1.9 billion, up $211 million on last year. The group is looking for $500 million in merger savings by 2005.
Advertising giant WPP firmed 3 3/4 pence to 576 1/2 pence on the back of a survey indicating 15 of the company’s top 25 clients are planning to increase their spending.
Gloomy predictions, however, from hotelier Hilton Group about the continuing poor health of the hotels industry sent its shares down 6 pence to 196 pence, making it the second-biggest faller in the FTSE 100. First-half group profits of UKpound 110.5 million included a 40 percent slump in hotels profits to UKpound 56.1 million.
Retailer Woolworths was the FTSE 250 third-biggest faller, off 1 3/4 pence to 37 1/2 pence, after Investec downgraded its ratings on the stock.
Financial PR and advertising outfit Incepta drifted 1 1/4 pence from a year’s high of 21 3/4 pence after broker UBS downgraded the shares from buy to neutral because it thinks they are now looking too expensive. It generously raised its 12-month target price by 1 pence to 21 pence to reflect the current appetite for recovery plays by private investors. A trading update is due on Monday ahead of interims in October. UBS points out that the price has rallied by about 55 percent since announcing a rights issue and placing last month. Some brokers have been pinning their hopes on bullish comments about current trading following the recent pick-up in sentiment in the financial markets. UBS is sceptical.
Meanwhile, UBS has upgraded property developer Hammerson, down 1 pence to 552 pence, from neutral to buy on the back of interim results yesterday showing pre-tax profits up UKpound 10 million at UKpound 47.4 million. It has also lifted its target price from 555 pence to 625 pence.
Business parks developer Slough Estates slipped 61/4 pence, however, to 380 pence as it announced a fall in half-year pre-tax profits, down 5.8 percent to UKpound 71.8 million. New chief executive Ian Coull said he would sell four non-core assets, worth around UKpound 160 million.
Hedge fund operator Man Group rose 14 pence to 1224 pence. US securities house Morgan Stanley has upgraded its recommendation on the shares from equal weight to overweight and set a new target price of 1400 pence. Institutional investors have discovered an appetite for hedge funds, helping Man swell the amount of cash rolling in to record levels.
Newcastle United’s failure to grasp a place in the European Champions League after losing a penalty shoot-out to Partizan Belgrade was a disappointment to the fans and manager Sir Bobby Robson. It also upset the City, which marked it 5 pence lower at 31 1/2 pence.
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UKpound preceding a numeral refers to the United Kingdom’s pound sterling. (c) 2003, Evening Standard, London. Distributed by Knight Ridder/Tribune Business News.
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