Last updated: February 27, 2013 5:10 pm

Weir hits record high as FTSE recovers

Weir Group , the FTSE 100’s most shorted stock, hit a record high as its annual results triggered a bear squeeze.

The pumpmaker jumped 7.3 per cent to £23.22, its biggest daily jump in more than a year.

Its full-year profit of £443m was slightly above guidance given in November and a cautious outlook statement matched consensus expectations for low single-digit revenue growth and flat margins.

Nearly 16 per cent of Weir’s shares in issue have been lent out to short sellers, Markit data show.

The total has fallen from more than 25 per cent since June, with the stock soaring 66 per cent in the same period as concerns have eased about its exposure to a slump in demand for shale gas pumps in the US.

Lansdowne Partners and Blue Ridge Capital have been Weir’s biggest bears.

The hedge funds disclosed short positions of more than 3 per cent when the Financial Services Authority introduced disclosure rules in November.

US durable goods data and a reassuring Italian bond auction result helped the wider market, lifting the FTSE 100 by 55.44 points, or 0.9 per cent, to 6,325.88.

Vodafone rose 2 per cent to 165.1p following conflicting reports about its potential bid for Kabel Deutschland. Bloomberg said the acquisition plan had been put on hold while Reuters later claimed Vodafone was still keen on doing a deal.

“We think that by exploring an acquisition of Kabel, Vodafone has acknowledged some strategic weakness in not controlling fixed-line assets,” said Merrill Lynch.

But with management appearing to take note of shareholder opposition to a bid, Vodafone may back away from further acquisitions, the broker said.

Petrofac dropped 6.3 per cent to £14.97 after its annual results gave only vague guidance on the 2013 outlook. The rig engineer announced unexpectedly that it would make a $1bn investment into its offshore division, primarily to build a boat for deepwater jobs.

Miners steadied after recent falls, with Fresnillo up 2.3 per cent to £15.50 and Evraz up 1.6 per cent to 270p. Polymetal rose 1.5 per cent to £10.13 after the Russian gold miner was added to the Stoxx 600 index.

ENRC lost 2.6 per cent to 347p as it warned that it would take a “significant” impairment charge after writing down the value of copper, platinum and
aluminium assets.

The warning came a day before a trading update from Kazakhmys , ENRC’s 26 per cent shareholder, which has been widely rumoured to be considering a bid or break-up proposal for its Kazakh peer.

Kazakhmys closed up 1.2 per cent to 677p.

Intu Properties was down 2.6 per cent to 333.9p after it raised £280m with a share placing at 325p apiece.

BWin Party Digital led the bookmakers higher after New Jersey passed a bill that will allow existing casinos to offer internet gaming.

BWin, which has a joint venture with US casino operators Boyd and MGM, jumped 8.9 per cent to 150p.

888 Holdings climbed 4.3 per cent to 156.8p, although analysts highlighted recent comments from its key US customer Caesars that it may migrate to the rival Barrière gaming platform.

Engineer Bodycote rose 7.4 per cent to 543p after beating 2012 earnings expectations and saying it expected to make “modest progress” in 2013.

EasyJet , which looked likely to win promotion into the FTSE 100 next week, slipped 2 per cent to 977.5p.

3i Group advanced 4.5 per cent to 317.9p after chief executive Simon Borrows said he had paid nearly £7.7m to buy 2.5m shares.

Henderson Group lost 3.7 per cent to 153.9p after the fund manager reported £750m of outflows in the fourth quarter.

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