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Quiet open sees Footsie slightly down

It was a fairly quiet end to last week, and there has been little of note this morning as the summer holidays keep trading volumes fairly low. The early runners have been dominated by commodity plays after a rebound on prices, and in the mining sector all eyes were on figures from BHP Billiton, where the shares were up slightly mid-morning.

The group raised underlying earnings by 22% to $28bn in the year to June, on revenues up by 25% to $59.5bn. It added that in the short-term, it expected prices to remain high relative to historical levels, albeit with higher volatility, and our view is that whilst there are long term attractions here, the shares look set to drift back in the near future.

Elsewhere, Bradford & Bingley received acceptances for less than 28% of the new shares offered in its rights issue announced on 4th July 2008. This appears a lost cause at the moment, and one cannot rule out a Northern Rock style suspension at any time despite the potential bid approaches here. Adecco said it still wanted a friendly takeover of Michael Page, though it added it was keeping all its options open. MPI had rejected an offer from Adecco worth about 400p and reports at the weekend suggested Adecco had ruled out a hostile move. MPI meanwhile raised interim profits by 22% to £84.1m and the interim dividend by 20% though it said conditions in some of its markets deteriorated during H1 and its growth rates had slowed. Longs should stay put here as we may see more M&A action before this is over.

Head of Research at Blue Index, specialists in trading Contracts For Difference

18/08/2008

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