Sparkling forecast for can firm
DRINKS can maker Rexam fizzed up 2 per cent yesterday on suggestions it will achieve the strongest earnings growth among European paper and packaging companies over the next three years.
The £1.8billion company recently extended its credit and debt arrangements in an £860million refinancing package and broker Goldman Sachs said it was unlikely to breach its debt covenants.
Goldman said Rexam’s lowly rating, the pricing resilience of the drinks can market and its earnings growth potential made the company’s shares, up 6p to 2971⁄2p, a strong buy.
It was second top blue chip riser behind distribution group Bunzl, 11p ahead at 524p, reflecting another lacklustre session or equities in which the FTSE 100 Index gave up an earlier 47-point gain to close 7.91 adrift at 4187.
This was despite a rebound in the heavyweight mining sector, where Eurasian Natural Resources and Rio Tinto rose 13p to 657p and 35p to 1920p, Anglo American eased 1p to 16271⁄2p having earlier risen to 17081⁄2p amid speculation that Brazilian giant Vale was gearing up for a takeover approach.
Standard Chartered was 21p in the black at 1160p as Goldman told clients to buy to reflect the relative strength of the Asian banking market.
Investors switched on to satellite broadcaster BSkyB, up 41⁄2p to 4691⁄2p, on the back of buy support from broker Nomura, while supermarket Wm Morrison was marked up 23⁄4p to 243p as Merrill Lynch told clients to buy with a 280p price target. London Stock Exchange was sold off ahead of first-quarter figures due next Wednesday, down 121⁄2p to 6391⁄2p, as Credit Suisse reckoned the company had suffered “significant erosion” in its market share
The broker warned yesterday: “Further market share erosion could result in its market share in UK listed stocks reaching a tipping point at which it is no longer the only place for price information in the UK equities market.”
Soft drinks company Britvic firmed 61⁄4p to 2993⁄4p on brisk trading as gossips suggested it could become a takeover target, while bid favourite SThree, which has been linked with Swiss giant Adecco, climbed 113⁄4p to 173p on the back of fellow recruitment firm Michael Page International’s trading update.
Car dealer Inchcape accelerated 1⁄2p to 191⁄2p as Citigroup told clients to buy with a 25p price target, citing the potential for cost cuts to keep profits on track.
WOB 1.8 billion shares changed hands in below average trading