London Evening Standard, market report column [London Evening Standard]
(Evening Standard (London, England) Via Acquire Media NewsEdge) Sept. 03--Mobile phone companies were the talk of the City today but experts said investors shouldn't overlook internet provider TalkTalk.
Traders' chit-chat marked out the TV, internet and mobile network group as a possible next potential target for Vodafone. The rumour, which claimed it could be easily absorbed by Vodafone, sent TalkTalk's shares up 4.4 percent.
The trader chatter accompanied a Buy note from analysts at JPMorgan. The broker's telecom expert Carl Murdock-Smith said the competition posed by the sports TV business of BT will not threaten TalkTalk which has customers at the budget end of the spectrum.
He said TalkTalk fell 12 percent in May when BT announced its channel would be free to BT Broadband customers but its package is 33 percent more expensive than many of TalkTalk's offerings, which will discourage people to switch.
Murdock-Smith said the group, run by Dido Harding, will become a "cash cow with low gearing" so he upgraded it to overweight and raised the target price to 300p.
TalkTalk rose by 10.9p to 260p which put it close to the top of the mid-tier table.
Despite BT's advantages being downplayed by Murdock-Smith, the telecoms giant _ which counts veteran sports broadcaster Danny Baker, pictured, among its presenters _ still managed a 2.8p rise to 340.8p.
The telecom sector remained flavour of the week as one of the biggest corporate deals was completed when Vodafone sold its 45 percent stake in Verizon Wireless to US partner Verizon Communications in an pounds sterling 84 billion deal last night. Vodafone slipped back 5.1p to 208p but it had gained 12.6 percent since details of the deal emerged last week. The focus on telecoms was intensified by news out of the US that Nokia has sold its mobile phone business and access to its patents for euro 5.4 billion (pounds sterling 4.6 billion) to American giant Microsoft.
After a bumper day across the wider market yesterday when the benchmark index finished 1.45 percent better, today traders couldn't manage to stay in a positive mood and the FTSE 100 slipped back 15.87 points to 6490.32.
The run of bad luck at Tullow Oil looked set to continue yesterday after the explorer announced it had drilled a dry hole off the coast of Mozambique. But bargain hunters caused it to rebound today and it was top of the blue-chip leaderboard, ahead 26p to 1044p.
Back on the mid-cap index, packaging company DS Smith crumpled 3.6p to 266p when it warned that its extensive European operations still face "challenging" economic conditions although it said it is "on track" for a strong 2013.
The departure of the boss of telecom-testing equipment supplier Spirent Communications helped it up 6.4p to 135p.
On AIM, video search engine Blinkx jumped 10.75p to 156.5p after two analysts sung its praises. Citi raised its price target to 185p and Jefferies initiated coverage with a Buy and a 190p price target.
Oil explorer Gulf Keystone Petroleum appointed another independent director to beef up new chairman Simon Murray's board. Gulf has hired Andrew Simon as a non-executive director but the business lost 0.75p to 174.1p.
(c)2013 London Evening Standard
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