Cost-savings boost for Smiths
HOPES for more cost-savings and healthy aftermarket sales in its John Crane oil and gas seals business gave engineer Smiths Group a near-4 per cent boost yesterday.
Morgan Stanley told clients to buy the stock, up 26p to 705p, the second big broker this week following Deutsche Bank to talk up Smiths’ prospects following a fall of 20 per cent in its market value this year.
“The market is overlooking the resilience of Smiths’ portfolio and its self-help potential”, argued Morgan Stanley.
A pick up in crude and metals prices fuelled demand for heavyweight oil and mining sectors, helping to send the FTSE 100 Index 49.96 points higher to 4279.98.
Platinum producer Lonmin advanced 80p to 1214p and copper group Kazakhmys firmed 40½p to 630p, Fellow Kazakh miner Eurasian Natural Resources added 42½p to 662½p, while Rio Tinto strengthened 112p to 2131p. Tullow Oil flowed 38½p north to 910p.
Life and pensions group Friends Provident, 2p poorer at 67p, and credit checking agency Experian, down 13¾p to 445p, were among the big blue chip casualties as their shares traded without the right to the latest dividend.
Investors also switched out of the defensive food retail sector, where Wm Morrison and Tesco were marked down 4½p to 239¾p and 5½p to 357¼p, while Sainsbury’s eased 1¼p to 314p.
Publisher Reed Elsevier dropped 3¾p to 457p following bearish comments from broker Citigroup, which cut its earnings forecasts for this year by 11 per cent.
Cable & Wireless rang up a 1¼p rise to 132½p on the back of a £207 million deal with National Grid, off 2p to 538½p.
Household and personal care products group McBride gained 13p to 136p as analysts upgraded their profit forecasts following a strong trading update.
Pubs group Marston’s frothed up 6p to 118p as broker UBS turned buyer from its previous neutral stance with a 139p price target, while investors also found a thirst for Enterprise Inns and Punch Taverns, up 8¾p to 127¾p and 6½p to 1081⁄4p.
Retailer Carpetright fell 21½p to 562½p ahead of annual results due next Tuesday, while Dairy Crest and Electrocomponents retreated 8¾p to 308¼p and 4¼p to 145¾p as their shares traded ex-dividend.
Gold explorer Centamin Egypt struck it 5¾p richer to 86¾p on rehashed bid speculation.
