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Market forces: It's good to TalkTalk as euro debt nerves grip markets
(Guardian (UK) Via Acquire Media NewsEdge) With the FTSE 100 falling to its lowest level for nearly two months on growing concerns about the European debt crisis, there was precious little for investors to cheer yesterday.
TalkTalk was an exception. The telecoms group rose more than 2% as analysts at UBS and Goldman Sachs highlighted its potential as a takeover target. Raising its recommendation from neutral to buy, Goldman said: "TalkTalk could be an attractive M&A candidate for a UK fixed-line player seeking scale or a mobile operator that believes in the cross-selling opportunities of fixed-mobile convergence."
Vodafone has been suggested as a possible bidder, though many dealers are sceptical. TalkTalk closed up 3.4p at 149.1p, also helped by news that a non-executive director, Ian West, bought 181,700 shares last week at 137.58p.
Overall, the FTSE 100 dropped 112.60 points to 5835.89, its biggest one-day fall since mid-April, with Wall Street down about 160 points by London's close. Markets fear Greece's financial problems are spreading. After Friday's downgrade of Greek debt and Standard & Poor's move to put Italy on negative credit watch came news of large regional election losses for Spain's socialists, putting in doubt its own austerity plan.
On top of that, China's manufacturing slowdown sent base metal prices and mining shares lower. Anglo American fell 121p to pounds 28.30 1/2 . The commodities trader Glencore continued to slide from last week's 530p float price, losing 10p to 514p. Unconditional dealings in Glencore shares begin today. It is due to join the FTSE 100 at the close of play, replacing Invensys, which was down 7.4p at 295.2p.
The prospect of another Icelandic ash cloud causing havoc rattled airline and travel company shares. International Airlines Group, the merged British Airways and Iberia, lost 12.6p to 235p, while Easyjet fell 17.6p to 345.1p and
Tui Travel dropped 7.6p to 229.8p.
On Aim, EKF Diagnostics climbed 3p to 23.5p. The company, which focuses on diabetes testing, said it was buying Stanbio Laboratory of the US for $25.5m (pounds 15.8m), part-funded by a placing at 20p a share to raise pounds 13m. It has also signed a distribution deal with the US group Alere. In a year when it decided to move into diagnostics, it reported a pounds 1.12m loss on revenues of pounds 6.48m. During the year it bought EKF and two other businesses, and sold its legacy Admiral Sportswear business.
nick.fletcher@guardian.co.uk
(c) 2011 Guardian Newspapers Limited.
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