London close: Strong end to a strong day

17th Mar 2011 16:49

London's blue chips were strong all day and boosted late on by a strong start in the US where the Dow notched up a triple-digit gain in quick time. For once, investors overlooked the ongoing bad news on the Japanese earthquake and turmoil in the Arab world to hunt out a few bargains. Heritage Oil was wanted after reports in the FT indicated the company has rejected an informal offer of 425p per share from an Abu Dhabi based investor."This would represent a 47% premium to yesterday's close and a 25% premium to our current target price of 341p," said resources specialist Westhouse Securities. "It would also add another potential suitor pursuing Heritage, after weeks of speculation regarding interest from BG Group," the broker added.The broker noted that there is also speculation on how the Ugandan government will treat the $405m Heritage has lodged with the Ugandan Revenue Authority while Uganda and Tullow Oil tussled over the taxation ramifications of Tullow's purchase of Heritage's Ugandan assets."Reports that Tullow has deposited $469m with the Ugandan government have increased speculation that Heritage will recover a substantial portion, if not all, of the $405m," the broker said.In company news, Legal & General is confident, despite a drop in full-year operating profit, as sales rose 28% and the government's decision to cut state benefits forces people to make their own provisions. The final dividend goes up 25%. Share price reaction was negative, with L&G in the red in an otherwise strong insurance sector that saw both the Pru and Aviva race ahead.Lloyds Banking Group is cutting another 570 jobs and closing its Cheltenham & Gloucester (C&G) mortgage range. The latest losses take the number axed since Lloyds, still 41%-owned by the British taxpayer, took over rival HBOS in 2008 to 26,770. RBS, meanwhile, confirmed its top 323 staff took home £375m between them last year, about £1.2m each on average.Asset manager Investec expects a rise in UK operating profits to offset a flat performance in South Africa in the year to 31 March, but warns that the slow pace of economic recovery has delayed an improvement of the level of non-performing loans.Global property markets are bouncing back strongly judging by the results from international estate agent Savills, with Asia Pacific putting in an especially strong performance. Group revenue for 2010 was up 21%, or 19% in constant currency (cc) terms to £677.0m from £560.7m in 2009. Underlying profit before tax soared 88% (83% in cc terms) to £47.3m from £25.2m in 2009.Profits were in line and sales a little higher at electronic and industrial components supplier Premier Farnell last year. Revenue in the year to 31 January 2011 rose 21.4% to £990.8m from £795.3m the year before.Construction products supplier SIG was a top performer today after it posted higher profits in 2010 as it recovered from the economic downturn following the 2008-09 global crash, but warned that government cuts will counteract private sector growth this year. Green outsourcing company Eaga, in the process of being bought by support services giant Carillion for £306m, has got the £300m of funding needed for a UK residential solar panels project. Media buying and market research group Aegis saw a return to organic revenue growth in 2010. Revenue in 2010 rose 8.4%, or 6.4% in constant currency (cc) terms, to £1,459.4m from £1,346.5m in 2009. The market had pencilled in a figure of £1,428m for revenue.Stockbroker and investment bank Panmure Gordon posted a loss in 2010, though things improved in the second half and the company says it enters 2011 with a promising pipeline.Banking and financial services group Arbuthnot Banking said it is optimistic about the outlook for 2011 as it reported flat annual pre-tax profit. The niche retail bank posted a pre-tax profit of £5.1m in 2010 unchanged from the year before. Group earnings per share increased by 7% to 25p.