Market report: Friday close

By MICKEY CLARK FOR MAILONLINE
Updated:

 

IT IS crunch time on Monday for BT Group's new management when it lays out its stall for the City to see.

Chairman Sir Christopher Bland and new chief executive Ben Verwaayen are due to give a presentation for the great and good of the Square Mile. They will be outlining their plans for the future and the message is expected to be upbeat.

Brokers say the new team has already done a good job in reducing the telecom carrier's massive debt mountain from almost £30bn to about £12bn but a lot depends on where the group goes from here. Much of the focus of Monday's meeting will be on its broadband technology, providing high-speed internet access using conventional telephone lines.

BT today dropped back 10 1/2p to 273 1/2p and remains well below its peak of 1053p reached several years ago. Kevin Fogarty at broker Teather & Greenwood says the meeting should ensure the flow of good news continues and the shares could touch 300p. JP Morgan is more cautious and says questions remain on strategy.

Meanwhile, Vodafone slipped 1/4p to 131 1/4p after reports claiming that the group was poised to make write-offs totalling $14bn (£9.8bn).

The last day of the tax year saw the rest of the market enjoy modest gains, supported by a positive performance overnight by the Dow in New York. The FTSE 100 index ended the day up 24.1 at 5233.6.

Standard Chartered jumped 12p to 765p ahead of a presentation for brokers today to outline its strategy for improving returns to shareholders from its wholesale banking business. Its main aim will be to increase the margin between revenue growth and costs by between 3% and 5% over the next few years.

Foreign ownership in shares of BAE Systems now exceeds 50%. The Government recently lifted the 49.5% limit but that has still to be approved. BAE rallied 12 1/2p to 365p.

GlaxoSmithKline, up 35p at 1630p, was able to reverse yesterday's losses on claims that it may be contemplating an £80bn merger with American drug giant Bristol-Myers Squibb, which rocked Wall Street earlier this week with a profits warning.

Scottish Power fell 4 1/2p to 363 1/2p after several brokers downgraded. Deteriorating trading conditions have prompted

Merrill Lynch to slash its pre-tax profit forecast for the year to next March by £131m to £735m, while cutting its target price from 335p to 300p.

Last month SP announced plans to rebase the dividend following the disposal of Southern Water. Merrill warns that the dividend may be rebased as low as 18p, a fall of 35%. Rival Lehman Brothers has cut its SP earnings forecast for 2002-04 and trimmed its target price 7% to 460p.

Oil shares were again marked lower, BP losing a further 1 1/4p to 608 1/2p as US securities house Goldman Sachs urged clients to take profits. Shell fell 3p to 504p. Goldman has raised its target price for oil for 2002 and 2003 from $16 a barrel to $20.

Biocompatibles firmed 5 1/2p to 103 1/2p after it announced plans to hand £100m back to shareholders, equivalent to 70p a share. A further £35m, or 25p a share, will be paid once funds in an escrow account are released.

• Prices and indices in this section are supplied from various sources and calculated at different times and may not always match those listed on the site.

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