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FTSE revives but Centrica slides over gas rigging fears

The FTSE 100 rallied to close 19 points higher, but Centrica fell in response to allegations of gas price fixing.

 
FTSE revives but Centrica slides over gas rigging fears

16.55: The FTSE 100 turned round to close 19 points or 0.3% higher at 5,786, but Centrica (CNA.L) was one of the day's biggest fallers in response to allegations of gas price fixing.

Centrica, the owner of British Gas, fell nearly 9p or 2.75% to 310.8p despite issuing a statement denying its involvement and saying it had 'very robust governance and compliance policies'.

It said its traders were prohibited from providing price information to reporting agencies and stressed there were more than 50 partcipants in the market, not just energy suppliers.

SSE (SSE.L), down 12p to £13.76, also denied its involvement. 'We are entirely confident that our energy portfolio management team operate in a fair and legitimate way.'

According to a report in the Guardian, the wholesale gas market was subject to price fixing in a similar way to the manipulation of the Libor interest rate by banks.

Seth Freedman, the whistle blower who helped the Guardian in its story, told the BBC that he was assisting the Financial Services Authority in its inquiries into the gas market. He said the City watchdog had been 'amazing' in its response. Energy regulator Ofgem said it was also looking into the claims.

A spokesman for the prime minister said any energy companies found guilty of rigging gas prices should be fined and severely reprimanded.

The energy sector was also clouded by a sharp fall in the share price of E.ON, the German utility, after it said it was reviewing its outlook for next year in light of the European recession.

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16 comments so far. Why not have your say?

anil kumar

Nov 13, 2012 at 12:27

Vodafone is very likely to test the 155p level.

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Brian Richards

Nov 13, 2012 at 12:53

It's a cheap share at 170p!

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David J Robertson

Nov 13, 2012 at 13:44

OK Brian --- if we accept your 'guidance' the price is 159.90p, how much low will Vodafone fall?

I currently hold and if it continues to fall (and I think it will), quite possiblly 140p, (I think) that would be a great time to buy. I for one will very interested in this share.

Regards

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Mystery X

Nov 13, 2012 at 14:01

I agree. It is a solid share. The price will be supported when Vodafone starts buying in the market. It has declared that it will start spending $1.2 billion in share buy backs in January 2013. I bought a small quantity at 159P and will buy more if it falls futher.

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anil kumar

Nov 13, 2012 at 14:01

Oh at 140 I would be a buyer too David....But unless market collapses,I doubt it will go as low as 140.

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Brian Richards

Nov 13, 2012 at 14:14

I doubt very much that it will drop to 140p unless there is a corresponding big drop in the ftse 100.However both BG a BBY were heavily punished with big drops in there share prices so who knows ,for me it's a hold for the long run.

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Anonymous 1 needed this 'off the record'

Nov 13, 2012 at 14:43

I think its a good buy at this level. I have bought at 1.60 level and if it rises to 1.65, I shall sell. Its unlikely to go lower, in case it does its an investment.

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Maverick

Nov 13, 2012 at 15:09

Say you spent £10,000 buying Vodafone shares two years ago at 165p. It's now 160p. You have had dividends worth £1,200. So you now have £10,896.

But inflation over that period has reduced the value of your £10,896 by £956.

Well done guys, that's a really good investment. I must buy some more of these shares . . . .

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Anonymous 1 needed this 'off the record'

Nov 13, 2012 at 15:21

This is overdone, Vodafone is a solid company, its not going to go bust. I am buying 20 k

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Anonymous 1 needed this 'off the record'

Nov 13, 2012 at 15:35

Watch the shares, they are going up as people snap up the shares. They are still a good buy

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Maverick

Nov 13, 2012 at 16:10

Anonymous 1 - "There's none so blind as those that won't see."

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Anonymous 1 needed this 'off the record'

Nov 13, 2012 at 17:04

How to you mean, Maverick ?

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Maverick

Nov 13, 2012 at 20:59

Anonymous 1 - Meaning, if you had used your £20,000 to buy Vodafone shares two years ago, taking inflation into account today you would have £19,880 (and that includes the dividend).

That's not investing. It is losing money.

So what if it's a solid company? If it's out of favour with the markets, no amount of support from private investors is going to make the share price rise.

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MattM via mobile

Nov 13, 2012 at 22:11

Two years is nothing for a long hold. Indeed, if you are holding for the income then a small inflation adjusted drop is of little concern.

I will continue to hold. It's just getting a spanking from the market. Mobile phone use is only going to increase over the next decade.

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Anonymous 2 needed this 'off the record'

Nov 18, 2012 at 17:03

you buy this share for the income as it is a long term hold.

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Maverick

Nov 22, 2012 at 16:31

Anonymous 2 - Yeah, I seem to remember people saying that about Ferranti and Woolworths . . . . .

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