AN UPBEAT trading statement from America’s GFI pulled Icap smartly higher on hopes that this month’s update from the world’s biggest inter-dealer broker will also impress.
After Thursday’s London close, New York-based GFI accompanied its $86 million (£46 million) purchase of Amerex Energy’s brokerage arm with the disclosure that its third-quarter profits would be 30 per cent ahead of last year. Only a month ago GFI said that its numbers would be 20 per cent ahead, implying that the third quarter had been strong throughout.
Oriel Securities found that update reassuring, given earlier evidence that the third quarter had been quieter than the second. Chris Smith, analyst, used it as his cue to cite Icap as one of Oriel’s few strong buys in its sector. Mr Smith expects the broker, which is due to release a pre-close statement later this month, to chalk up a 25 per cent increase in first-half profits. Icap gained 16p to 466p, with the FTSE 100 settling 21.2 ahead at 5,879.3.
Strong numbers from across the Atlantic bolstered GUS, up 25p to 973p, where Equifax, the credit-checking agency that competes with the retailer’s soon-to-be-demerged Experian arm, raised its 2006 profit forecasts. But it was Next that took the top FTSE 100 slot, gaining 63p to £17.28 ahead of Wednesday’s first-half figures. JPMorgan reckons that weak interim results are largely factored into the share price, and suggests that current trading — helped by an extended sales period, favourable weather and soft comparative figures — should show signs of improvement.
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A downgrade from “buy” to “hold” from Citigroup sent AstraZeneca 45p lower to £33.00. The US broker says that the strong share price rise in the drugs group over the past two months leaves limited upside. It cited investor concerns that pharmaceutical stocks could come under pressure if the Democrats retake control of the House of Representatives or Senate in November’s mid-term US elections.
An outperform recommendation and £13.75 target from Credit Suisse saw Standard Chartered rise 18p to £13.19. After a lunch with Peter Sands, finance director, Jonathan Pierce, the broker’s banking analyst, is increasingly confident of the prospects for accelerated growth in the bank’s consumer businesses. He believes its greater diversification will enable it to take regional “shocks”, such as credit card impairment in Taiwan in the first half, in its stride.
Prudential advanced 5½p to 583p as Merrill Lynch moved from “neutral” to “buy”. David Nisbet, analyst, feels the shares have been unfairly depressed since July’s interims, and says that the insurer’s American, Asian and asset management businesses are performing well.
Sage Group rose 5½p to 242½p after an upbeat speech from Paul Harrison, finance director, at a Deutsche Bank IT conference in London. He reassured delegates that the accountancy software firm, which issues a trading update next month, had not lost market share to Microsoft. Deutsche Bank repeated its “buy” advice and said it remained comfortable with year-end forecasts.