Market report: Thursday close

By MICKEY CLARK FOR MAILONLINE
Updated:

 

CITY speculators were sniffing around advertising and marketing agency Cordiant today in the belief that the longawaited bid for the company may soon be made.

Shares in Cordiant, which owns Bates Worldwide and design company Fitch, firmed 3 1/2p to 109p on news that French rival Publicis had announced plans to raise e600m (£372m) by way of a convertible bond on the Paris Bourse. Cordiant currently boasts a price tag of £420m. Last month it was moved to issue a statement denying speculation that it was involved in early bid talks with Publicis or American advertising giant Omnicom.

Cordiant certainly looks vulnerable to a bid. The worldwide economic slowdown has badly affected advertising agencies. Last year Cordiant was forced to issue three profit warnings in the space of four months and laid off more than 1000 staff. Its share price subsequently dived from a peak of 287 1/2p. Not all the advertisers were finding support today and WPP Group lost 32p at 726p.

There was little cheer elsewhere for City investors as share prices again extended this week's losses following an abysmal performance by the Dow overnight that saw the index give back a lead of 120 points to finish 56 points down.

US brokers Goldman Sachs and Merrill Lynch are said to have been heavy sellers of the financial future. This afternoon Wall Street made a nervous start to trading as the FTSE 100 index fell 32.5 to 5196.

Media and hi-tech companies were among the worst hit as investors decided to concentrate their efforts on defensive sectors.

News and financial information provider Reuters fell 16p to 700p, making it one of the biggest fallers among the top 100 companies. Publisher Pearson shed 20 1/2p to 818p and Vodafone lost 6 1/4p to 164 1/2p on turnover of more than 450m shares, reflecting the delayed sell-off of Verizon Wireless in the US.

BP fell 1 1/2p to 522 1/2p on the back of a gloomy fourth-quarter trading update that warned of falling oil prices, shrinking refining margins and collapsing demand for aviation fuel in the wake of events in the US on 11 September.

Logistics and personnel services group Hays was static at 208p despite Goldman Sachs downgrading the shares from market outperform to perform. It expects earnings to decline this year and show only modest growth in 2003. Goldman has a 12-month target price of 240p.

Bob Morton's Vislink continues to fall short of City aspirations, losing another 1p to trade just above its 12-month low at 32 1/2p. Morton warned that pre-tax profits for last year would miss market expectations but would be ahead of the £2.35m achieved in 2000. He blamed a delay in two big contracts on the television broadcast side. Even so, the group is expected to achieve earnings of 3 1/2p a share, which leaves them trading on a prospective price-earnings ratio of around 10.

Broker Old Mutual Securities has picked its top stocks for 2002. They include Abbot Group, up 10 1/2p at 138p, Charter, down 1/2p at 138 1/2p, and National Express, down 5p at 559 1/2p. It has also recommended three sells - Close Brothers, down 22 1/2p at 857 1/2p, JD Wetherspoon, off 21 1/2p at 371 1/2p, and BPB, 1 3/4p lighter at 315p.

• PRICES and indices in this section are supplied from various sources and calculated at different times and may not always match those listed in the tables. Ofex prices relate to the previous close.

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