Market report: Friday close

By MICKEY CLARK FOR MAILONLINE
Updated:

 

CASH-strapped British Airways rose 6p to 147p after raising further much-needed funds. It has sold 955,011 shares in France TÈlÈcom for £23m. Yesterday it saved a further £24m by scrapping all staff Christmas bonuses and telling 3500 managers to take a pay cut. The stake in France Tèlècom was acquired earlier this year in exchange for its holding in Equant, which was then worth £70m.

Heathrow and Gatwick airports operator BAA climbed 9 1/2p to 574 1/2p in response to proposals on landing charges from the Civil Aviation Authority.

Broker Merrill Lynch responded by raising its target price to 754p while rival Credit Suisse First Boston has set a target of 635p. Supported by an overnight jump of nearly 190 points by the Dow, share prices in London were being marked higher. The FTSE 100 index rose 58.30 to 5129.5 in thin trading.

British Telecom suffered a setback today - just weeks before the proposed demerger of its mobile telephone business mm02 - after one big City firm chose to downgrade the shares. Broker UBS Warburg surprised the market by moving from buy to hold and slashing its target price of 415p to 370p. It has also downgraded its valuation of mm02 from 100p to 85p and set a target price for the shares of 80p for when they begin trading on 19 November. The only crumb of comfort for shareholders is that the broker continues to view the BT share price as a 'relative performer' in an overvalued sector.

This came on the day when the London Stock Exchange confirmed that BT and mm02 will be constituents of the top 100 companies index when the demerger is completed. BT closed down 2 3/4p at 340p. Broker Credit Lyonnais Securities likes the look of Alliance & Leicester, up 20 1/2p at 733 1/2p, and has been urging clients to switch out of Northern Rock , which could be the subject of a takeover approach when legal restraints come off in April. Any offer for A&L would have to be pitched in excess of 900p a share, it adds.

Tesco stayed at 246 1/2p despite broker ABN Amro issuing a sell recommendation. The broker says its sales growth has slowed by about 8% in recent weeks and a till-roll measure of sales shows the group losing market share.

The buyers are piling into Biotrace International, 2p better at 93p on turnover of more than 153,000 shares. The group has developed a device for detecting biological weapons that is expected to play a major role in the fight against terrorism. The company's own broker Beeson Gregory came out with a buy recommendation yesterday and expects results for the current year to exceed market expectations.

Hamleys bounced off the bottom with a jump of 15p to 117 1/2p. It is expected to enjoy a boom in sales of Harry Potter merchandise to coincide with the launch of the film.

The market quickly warmed to proposals from Prudential and the shares responded with a jump of 48p to 782p, making them the best performers among the top 100 companies. The proposed restructuring of the business will see its general insurance arm transferred to Winterthur in a deal worth £810m. The Pru is also shedding 2100 staff and will incur a £170m restructuring charge.

• 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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