The London market’s new year bounce continued into a fifth session, but Tate & Lyle missed the trend.
Tate lost 8.5 per cent to 386¼p amid speculation that Harbinger, its second-biggest shareholder, might have to sell to meet redemptions.
The US hedge fund run by Philip Falcone cut its holding from 19 per cent to 13.9 per cent through December.
Tate shares were also hit by concerns that the sweetener industry had failed to push through price rises. Supply contracts for 2009 have been fixed at 1-2 cents above last year’s levels, but below the 3½-cent increase requested, according to a trade press report.
Tate shares rallied 5.5 per cent last week, helped by talk of a Russian investor looking to buy a 10 per cent stake but had struggled to find a broker willing to take the trade.
The FTSE 100 closed up 0.4 per cent, rising 17.85 points to a two-month high of 4579.64. Activity remained at holiday levels, however, with just over 840m blue-chip shares changing hands.
Vodafone rose 4.4 per cent to 145.05p after Cazenove updated forecasts to factor in recent sterling weakness.
Spot rates for the euro and dollar are now below Vodafone’s guidance by 17 per cent and 13 per cent respectively, Cazenove said. The currencies make up about four-fifths of group operating profits.
Other overseas earners found support, with Smith & Nephew gaining 3.9 per cent to 464½p in spite of a profit warning from Conmed, a US competitor to S&N’s endoscopy business.
International Power led the blue-chip risers, up 7.4 per cent to 265¾p, on word of a reassuring management meeting with Deutsche Bank.
Shire resilient in push to take profits
Shire beat a trend towards profit-taking among the defensive pharmaceuticals stocks after Pfizer said it was eyeing possible acquisitions.
Analysts also noted that Shire had pushed through sharper-than-expected price increases for its blockbuster hyperactivity drugs, with Vyvanse up 7 per cent and the legacy Adderall XR treatment 20 per cent higher. Shire closed at £10.31, down 0.3 per cent.
Analyst Iain Turner said the utility should meet 2008 forecasts as better European profits than expected had countered a tough US market and a currency hit in Australia.
Engineer Invensys gained 5 per cent to 182.8p, supported by the perennial rumour that it could be a target for Siemens.
Retailers inched higher after the John Lewis department store chain reported flat like-for-like sales over the five weeks to January 3. The news bolstered confidence that revenue should not disappoint.
Marks and Spencer, which updates on trading on Wednesday, rose 4.1 per cent to 230p. Debenhams firmed 11.8 per cent to 28½p and Next was 1.6 per cent easier at £10.91 before their statements, which are due on Tuesday.
Among the mid-caps, Hays jumped 9.3 per cent to 79¾p on a tip from UBS. “Despite the poor medium-term outlook we believe Hays’ dividend will be maintained in the medium term,” said the broker, which upgraded Hays to “buy”.
“Given the low interest rate background this yield looks very attractive.”
Hays and Michael Page, up 0.9 per cent to 227p, both give trading updates on Thursday.
Hopes of a breakup pushed Aegis 5.5 per cent higher to 81p. John Napier, Aegis chairman, was said to be lining up Merrill Lynch to carry out a strategic review, leading to speculation its Synovate market research unit could be sold or split out
Vincent Bolloré’s presence on the shareholder list made a full sale of the group unlikely, analysts said. The French financier bought his 30 per cent Aegis stake at an average price above 125p.
Natixis Securities said: “With market research groups enjoying higher multiples than advertising [stronger growth and speculative aspect], there is no doubt that the separate listing of Synovate would generate value. Groups such as Nielsen, GfK and Ipsos could be interested in such a target.”
Other media stocks benefited from an upgrade in Citigroup’s model portfolio, and on news that Theodore Kytiakou, Greek billionaire, has a war-chest of more than £2bn to buy UK and European broadcast, magazine and internet assets.
Yell Group was up 8.1 per cent at 50p and ITV added 3 per cent to 43p.
Chemicals maker Croda fell 5.2 per cent to 529½p in reaction to a downgrade to “in-line” from Cazenove. Cosmetics makers such as Clarins and L’Oréal had started reporting weakening demand that would flow back to suppliers such as Croda, said Cazenove.
