Daily Mail, London, market report column [Daily Mail, London]
(Daily Mail (London, England) Via Acquire Media NewsEdge) Sept. 03--THE juicy prospect of Vodafone's army of institutional shareholders pumping billions of pounds of cash back into the market once they receive the expected pounds sterling 40bn-plus dividend windfall from the mobile phone's pounds sterling 84bn sale of its 45pc stake in Verizon Wireless, helped blue chips get September off to a cracking start.
Historically the month has never been a good one for the stockmarket and the Footsie has on average fallen 1pc. Dealers still painfully remember the run on Northern Rock in 2007 and the collapse of Lehman Brothers 12 months later, both of which happened in September, sparking the great financial crisis and a global equities sell-off.
But the Vodafone deal and a survey showing that output in China's factories was the strongest in months in August boosted heavyweight miners and yesterday lifted the Footsie. It closed 93.26 points higher at 6,506.19, while the FTSE 250 soared 250.30 points to 14,875.48. Wall Street was closed for Labor Day.
As Vodafone buzzed 6.95p up to 213.2p in celebration of tying up a mega deal with Verizon, buyers chased other telecom stocks sharply higher on hopes more telephone number deals in the sector could follow. BT rose 12.9p to 338.2p and TalkTalk Telecom, sponsors of X-Factor, advanced 9.5p to 248p.
AIM-listed investment bank Shore Capital closed flat at 22p but dealers now say it should be re-rated. It holds a majority 58pc stake in Spectrum Investments which owns DBD, a German telecoms business. It holds licences to cover regional wireless and broadband services across Germany. It will be able to provide 4G Data services or provide wholesale services for German mobile operators.
How long before an industry giant dials up a deal that would be hard for Shore Cap's major shareholder and chairman Howard Shore to refuse? Fund managers reflected the view that business should be brisk in the final quarter with the sector seeing a big increase in new business as institutions reinvest their Vodafone divi cash. Aberdeen Asset Management rose 15.8p to 368p, Henderson Group 9.3p to 174.3p, Prudential 38p to 1116p and Standard Life 12.3p to 343.5p.
It should be a big month for banks. Chancellor George Osborne confirmed in June that Lloyds Banking Group is to return to private hands. Rumours have been rife that the government will sell all, or part (10pc), of its 39pc shareholding in September now that the share price is comfortably above the reported break-even price of 61.2p. The close was 0.77p better at 73.32p. Barclays, 2.35p dearer at 285.7p, announced a proposed pounds sterling 5.8bn 1-for-4 rights issue at 185p a pop in July. It is expected to be launched in the coming weeks.
The miners charge was led by Rio Tinto, 122p better at 3035p. Buyers piled in after it revealed it had begun shipping iron ore from its newly expanded port, rail and mine facilities in Western Australia. The first 165,000 metric ton shipment is bound for Nippon Steel & Sumitomo Metal Corporation's Kimitsu plant in Tokyo. Fresnillo, on the other hand, fell 28p to 1275p after UBS downgraded to neutral from buy following the stock's 27pc rally in August.
Buyers climbed aboard discount airline easyJet ahead of Thursday's results and the shares closed 51p up at 1284p.
Satellite communications services group Inmarsat rose 37.5p to 732.5p following a Morgan Stanley upgrade to overweight from equalweight and lifted its target price to 820p from 740p. The US broker reckons the market is undervaluing its US operations even after DISH Network's pounds sterling 1.42bn bid for LightSquared.
Seeing Machines, a maker of vision-based machines, jumped 0.38p or 9.38pc to 4.38p after securing a A$1.5m contract from BHP Billiton for its Driver State System fatigue and distraction monitoring solutions.
Despite news it has plugged and abandoned its Buzio-1 exploration well offshore Mozambique after it failed to find oil, Tullow firmed 10p to 1018p.
Big data software specialist WANdisco gained 50p to 1105p as the market welcomed former Sage executive Paul Harrison as chief financial officer. Panmure Gordon, the stock's biggest fan, has a target price of 1149p.
Acquisition news failed to excite Acal, 2.5p off at 270p. The European specialist electronics supplier has bought Young Electronics Group for pounds sterling 1.7m which provides electronic components, solutions and services. Arian Silver dropped 8.33pc to 6.88p despite completing financing and the acquisition of a processing plant that will allow it to treat up to 1,500 tonnes per day of silver-lead-zinc ore.
As Peppa Pig's owner Entertainment One looks forward to promotion to the FTSE 250 next week, the shares remained unchanged at 215p.
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