UK MARKET TALK ROUNDUP: SHARES LOSING

25th Jun 2010 12:06

Stocks on the fall in the UK today. Compiled by Dow Jones Newswires Markets Desk, [email protected] Contact us in London. +44-20-7842-9464 [email protected] 1106 GMT [Dow Jones] Investec increases Chemring (CHG.LN) price target to 4150p from 4000p after announcing it is to acquire two operating units of Allied Defense Group (ADG). Estimates that the acquisition will enhance earnings by 4.5% in the first full year. Meanwhile, notes that the market was unsettled by a 3% decline in organic revenue growth in 1H. But thinks despite this set-back and the challenging macro environment, Chemring has opportunities to grow. As a result, expects continued positive earnings momentum. Has buy rating. Shares -0.3% at 2990p. ([email protected]) 1006 GMT [Dow Jones] Panmure Gordon cuts Balfour Beatty (BBY.LN) price target to 330p from 380p "to reflect market uncertainty in the run-up to the Autumn spending review." Nevertheless, notes there is a strong need to invest in infrastructure in both the UK and the U.S., spanning the transport, social and energy segments and reckons this provides an excellent opportunity to invest in Balfour. Says the current valuation is attractive and the company's recent moves on diversification have enhanced and strengthened its offering. Reiterates buy recommendation. Shares -0.9% at 242p. ([email protected]) 0844 GMT [Dow Jones] BP (BP) -6.3% at 305p, as spends GBP2.35B to date on the Gulf of Mexico spill. The company's 5-yr CDS also widen to 555 bps, according to Markit, up 19 bps on the day. Nomura also cuts its price target to 465p from 593p, saying a heavy inversion of both credit yield and equity volatility suggests the market is concerned about a near-term credit event around BP. Says this perception of near-term credit risk is highly damaging for BP. Sees pressure growing on the company to assure sufficient funding, and with debt expensive and asset sales taking time, says equity-linked financing - perhaps backed by Sovereign Wealth - could prove an attractive short-term solution. Sees the equity dilution countered by the benefit of financial solidity. Says this scenario could result in significant uplift to shareholder value. Keeps buy rating. ([email protected]) Contact us in London. +44-20-7842-9288 [email protected] (END) Dow Jones Newswires June 25, 2010 07:06 ET (11:06 GMT)