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Daily Mail, London, market report column
(Daily Mail (London) (KRT) Via Acquire Media NewsEdge) Jul. 15--Whilst many smaller Harry hedge funds have run into trouble during the credit crunch, the "daddy" of them continues to show all of its rivals how to perform in a bear market.
Man Group closed within a stone's throw of its year's peak at 622p, up 21p. It recently revealed quarterly sales to private investors totalled ?1.8bn, its strongest ever three months, and funds under management at the end of June were ?2.5bn higher than the end-March total of ?40bn.
Bolt-on acquisitions have been a feature of its trading performance so far this year. It has bought a 50pc interest in Ore Hill, a US credit specialist fund manager, for ?97m and a 25pc interest in Bermuda-based hedge fund Nephila Capital for ?25m cash.
Speculation now suggests Man has approached entrepreneur Andrew Regan and bid him at least 15p a share for his stake in Commoditrade, 1/4p dearer at 11p. Regan's investment vehicle Corvus Capital (unchanged at 21/8p), owns 22.5pc, or 76m shares, in the AIM-listed company which houses the largest trading team on the London Metal Exchange.
Commoditrade made a ?17.6m profit last year and paid a maiden dividend in April. It makes good money in the good times and even more dosh in bad times when other asset classes underperform.
A year ago the shares hit a high of 58p when the company received a bid approach and rumours of a 65p a share bid from a European bank were rife. Prolonged talks were eventually terminated and ever since the stock has fallen away with the rest of the market.
The punch-drunk Footsie dragged itself off the canvas after last week's pummelling. News that the US Federal Reserve bank had come to the rescue of the nation's two largest mortgage finance companies, Freddie Mac and Fannie Mae, brought widespread relief. Then out-of-the blue news of Alliance & Leicester's (115p higher at 335p) Spanish bid approach gave dealing rooms another huge lift. The index soared 111.5 points by lunchtime but boiled over to finish 38.8 points better at 5,300.4.
Dealers in London took profits when they saw Wall Street fail to hold an initial gain of 138 points and trade 69 lower. Bears roared that second-quarter trading statements from banking giants Wells Fargo, Merrill Lynch and Citigroup later this week will not make pleasant reading. If true and yet more writedowns are wheeled out, markets will only have one way to go... further south.
Beleaguered Bradford & Bingley was rejuvenated by events at the Alliance & Leicester. It touched 65p before closing 5 1/2p up at 53p. Although still 2p below its rights price, the powers that be believe the fundraising will succeed and then within weeks a European bidder will gobble the mortgage bank up. Lloyds TSB, which owns Cheltenham & Gloucester, firmed 6 3/4p to 282 1/4p.
Amid reports of more job losses in the City, financial information giant Thomson Reuters shed 40p to a year's low of 1245p. Fewer traders, means T-R will be supplying fewer terminals.
Confirmation of a bid approach, possibly from Indian state-controlled ONGC, saw Russia-focused oil company Imperial Energy shoot 138p higher to 910p.
Betting shop group Ladbrokes galloped ahead to 250p on stakebuilding talk and closed 9 3/4p to the good at 238 3/4p. Heavy buying was reported from Ireland which prompted speculation that horseracing tycoons John Magnier and JP McManus were getting involved along with Irish compatriot Dermot Desmond.
Mears edged up 1p to 251p after disposing of its vehicle distribution business, United Fleet Distribution, for ?2.8m. Boss Bob Holt wants to concentrate on the company's core social housing and old people's care businesses. Broker Panmure Gordon said it was sold at a good price and was a necessary step forward. The sale of the mechanical and electrical division should follow at some stage. Its target price is 340p.
After saying that first-half revenues and profits will be significantly ahead of analyst expectations, software group SDL advanced 18p to 298p. Broker Kaupthing says the rating is cheap and the company is building a reputation of being one of a handful in the sector that consistently delivers to, or above, expectations.
Proximagen Neuroscience jumped 9p to 107 1/2p after the biotech minnow signed a licensing deal with Upsher-Smith Laboratories of the US for its experimental Parkinson's disease treatment, PRX-1. Proximagen will receive an upfront payment and milestone payments totalling up to ?116m upon the PRX-1 programme reaching certain development and sales milestones.
BOMBED-out Pan Pacific Aggregates held at 3p despite news that its recently acquired Pumptown granite quarry in British Columbia, Canada, posted record sales of over 28,000 tonnes of quarried aggregate product for June. Sales there have jumped by 70pc in one month and more than 200pc over the past year. Word is a small acquisition and sizeable contract is on the agenda which should see penny share punters return.
To see more of the Daily Mail and the Financial Mail on Sunday, or to subscribe to the newspaper, go to http://www.thisismoney.com.
Copyright (c) 2008, Daily Mail, London
Distributed by McClatchy-Tribune Information Services.
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