Pumping up the volume leads to boost for Cairn
MARKET REPORT
IF a prize was ever given by the London Stock Exchange to the most volatile stock in the Footsie it would have to go to Cairn Energy.
The Rajasthan oil explorer would win hands down. Market- makers never know whether they are on foot or horseback when dealing in the stock, which was all over the shop again.
It touched 1890p following an upbeat operational update before closing 90p higher at 1850p.
Cairn’s reassessment of three key Indian oilfields – Mangala, Bhagyam and Aishwariya – suggests that the group may have been under- estimating the volumes of oil in place.
Analysts and leading investors will be able to see for themselves when Cairn hosts a freebie trip to the sites from the 28-30 November. Dealers are confident that upgrades on recoverable reserves are bound to come thick and fast on their return.
Cairn has bounced back strongly from the 1700p level reached when four directors, led by founder and chief executive Bill Gammell, sold 600,000 shares at 1750p. Gammell, former rugby international and friend of both Tony Blair and George Bush, trousered £5m.
Eyebrows were raised when Dana Petroleum, with the ink hardly dry on its recent £ 53m deal with Gaz de France, passed the hard hat round to shareholders for a cool £35m. As broker ABN Amro placed 3.95m shares at 895p, Dana’s underlying stock nosedived 40p to 855p.
One miffed fund manager said: ‘Dana didn’t give any indication when finalising the Gaz de France deal that it needed any cash, and it clearly doesn’t. So why take shareholder loyalty to the ultimate limit?’ Heavyweights BP and Royal Dutch Petroleum fell 13p to 614p and 33p to 1810p respectively as crude prices dropped after the International Energy Agency reduced its forecast for oil consumption in 2006 for the fourth consecutive month.
The oil giants dragged the Footsie lower. It lost an initial 24-point gain to finish 16.3 points off at 5423.5. The Bank of England’s decision to keep interest rates on hold at 4.5pc came as no surprise.
Wall Street traded 26 points either side of Wednesday’s close following news that the US trade deficit in September had widened 11pc to an alltime high of $66.1bn.
Consumer packaging group Rexam, the old Bowater, rustled up a speculative rise of 151⁄ 2p at 512p amid continuing talk of a management buyout at ■
AIM- listed technology investor Nanoscience firmed
1⁄ 2p to 163⁄ 4p on news that Herald Investment Trust has acquired a 4.8pc stake. It follows share purchases by entrepreneur David Newton and Corvus Capital, run by Andrew Regan. They bought 6.1pc and 4.5pc of the company respectively. Nanoscience gets the early nod on any interesting investment opportunities that come out of Imperial College, where former Glaxo boss Sir Richard Sykes is rector. 550p per share. Rumours that US value investor Brandes was adding to its 12pc stake in the supermarket ahead of next Wednesday’s interim figures lifted J Sainsbury
7p to 2911⁄ 4p. Helped by the Jamie Oliver ads, dealers expect sales to have made their biggest improvement for some time.
Struggling
rival Wm Morrison gained 2p to 1691⁄ 2p on meaty turnover of 32.9m. Rumours persist that billionaire retailer Philip Green is keeping a close eye on the situation and could persuade veteran chairman Sir Ken Morrison to agree a deal early in the new year.
Hopes of a private equity bid helped Cable & Wireless buzz 2p higher to 1241⁄ 4p.
Construction
company Mowlem touched 199p and closed
41⁄ 2p better at 192p after rival Carillion, the former Tarmac, (31⁄ 2p down at 280p) confirmed a takeover approach.
Hays dipped 21⁄ 2p to 1183⁄ 4p after UBS placed 43.5m shares in the support services group at 1181⁄ 2p with various institutional shareholders. Insurance broker Admiral shed 93⁄ 4p to 450p after Citigroup placed 6.5m shares at 448p.
Metrocapital jumped 11⁄ 4p to 33⁄ 4p following the reverse takeover, backed by the Tchenguiz Family Trust, of the Braemar Group for up to £2.485m in cash and loan notes. Braemar manages a number of residential property investment funds, via collective and tax- efficient investment schemes.
Mining minnow European Goldfields soared 111⁄ 2p to 1121⁄ 2p after a deal with three metal traders for the lead/silver and zinc production from Stratoni, one of its three mines in Greece. It is worth £65m over a threeyear period.