By Sarah Turner
Broker moves took center stage for some British-listed shares on
Friday, with several utilities pressuring the top index after a
broker downgrade.
International Power , down 3.6%, was cut to neutral from
overweight at J.P. Morgan, while Scottish & Southern Energy ,
down 1.9%, was cut to underweight from neutral.
The broker said that the firms face an uncertain environment:
weak power prices; increasingly onerous environmental legislation;
significant capital spending to replace ageing capacity; and
political uncertainty.
Overall, the FTSE 100 index lost 0.4%, or 21.44 points, to
5,706.36, after closing at a fresh 2010 high on Thursday.
"With next week culminating in the month-and quarter end, plus
the prospect of many markets being closed for the long weekend, the
temptation to start booking some profits could start to lure many
in," said Anthony Grech, strategist at IG Index.
Other European shares were also backing away from annual highs
although the euro gained against the dollar after European leaders
set out details of a plan to support Greece. Sterling (CUR_GBPUSD)
also advanced against the dollar, rising 0.3% to $1.4865.
U.S. stocks edged higher in early action.
Shares of U.K. hedge fund manager Man Group were also under
pressure, trading down 2.1%.
The firm is looking for possible investments, acquisitions and
distribution deals in the U.S. and has spoken to GLG Partners (GLG)
and SAC Capital Advisors, Bloomberg reported Friday, citing people
with knowledge of the discussions.
Enterprise telecom provider Cable & Wireless Worldwide
shares started trading at 89 pence per share on Friday and were
recently at 95 pence. The firm, along with Caribbean operator Cable
& Wireless Communications , used to form Cable &
Wireless.
The combined price of 151 pence is greater than the last price
of Cable & Wireless of 148 pence.
Outside the top index, Regus shares were up 4.4%.
The office-space provider was upgraded to outperform from
neutral at Credit Suisse.
"We had thought that occupancy in particular would have
continued to decline throughout the first half of 2010 focusing
investor attention on shorter-term earnings risk rather than
longer-term value. But management now notes that pricing and
occupancy have stabilized," the broker said.
"With a trough in the first half, we expect earnings and cash
flow to more than quadruple from 2010 estimates to 2013 estimates,"
the broker added. Shares rose 2.9%.
The broker also upgraded Premier Oil to outperform from neutral
on Friday.
"With the shares at a 16% discount to our new-net-asset value
and target price of 1,436 pence, we think we get an attractive
option on the 2010 drilling campaign and a production base that
could more than double [over five years]," the broker said.
Shares were up 2% at 1,235 pence.
QinetiQ shares were down 4.3%.
The defense-sector firm was downgraded to sell from neutral at
UBS which also cut its price target to 130 pence, from 150
pence.
"We believe that market expectations are too high on earnings,
dividends and the prospect of a strategic rate plan announcement,"
the broker said. "We also believe the market under-appreciative of
the likelihood of an equity raising," it added,