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Standard Life tops weak FTSE as analysts eye divi appeal
by Chris Marshall on Oct 04, 2013 at 09:39
A secure dividend was cited by analysts as one of several reasons for investors to go ‘overweight’ Standard Life (SL.L) shares, with the insurer and asset manager resisting broader market declines on Friday morning.
JP Morgan Cazenove analyst Ashik Musaddi reiterated his ‘overweight’ rating on the shares, which will benefit from ‘UK operational leverage, growth potential in Standard Life Investments (‘SLI’) and a secure dividend’. He predicted the company’s £300 million special windfall for shareholders, announced alongside a surge in profits in March, would be brought forward.
Standard Life shares have outperformed the wider market over the past year, rising 23%. The City is now divided on the outlook for Standard Life shares, with a narrow majority saying they are a ‘hold’.
On Friday morning the company, up 2.4% to 352p, was competing with Tate & Lyle (TATE.L) for top spot on the FTSE 100.
The ingredients firm reported that its performance in the second quarter was ‘broadly in line with our expectations’. But that operating profit for the first half would be slightly lower because the cold spring and slow start to the summer had hit the US beverage sector.
Martin Deboo, an analyst at Investec said the update was ‘cautious’. The second half of the year could be better, but ‘this may prove challenging’.
‘Patience required. The long term story remains compelling and plenty of bad news is in the price,’ concluded the analyst who keeps his ‘buy’ rating.
The FTSE 100 couldn’t resist following the US and Asia lower. Britain’s benchmark index was off 0.2% at 6,434, heading for a weekly loss of nearly 1.7%, which is mostly a result of angst caused by the US government shutdown.
Carpetright (CATVU.L) was among the biggest fallers in London, down 10% at 605p after the retailer disappointed investors with a profit warning and the news that chief executive Darren Shapland is stepping down.
The carpet seller stated: ‘Whilst the self help activities are continuing to deliver, as a result of a combination of a softer UK market and a further step down in the Netherlands, it is likely the Group's full year profit will be significantly below our previous expectations.’
John Stevenson of Peel Hunt noted: ‘As with other home related retailers, Carpetright is seeing no benefit from improved housing market data or economic conditions'.
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by James Phillipps on Dec 09, 2013 at 07:52