Market Report: Burberry looking smart as it checks out mystery raider

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Shares in Burberry were sitting pretty on an ugly day for stocks as speculation mounted that the luxury goods giant was battening down the hatches to defend against a possible takeover bid.

A bizarre tale emerged yesterday evening that Burberry had asked its advisers to ascertain the identity of a mystery investor who snapped up 5% of the shares last month through HSBC, which refused to name its client.

However, a regulatory filing from HSBC yesterday revealed the client had dropped its stake to below 3%, the threshold above which it must notify investors about any buying or selling activity.

Burberry shares surged 65p, or 4.7%, to 1436p, their highest level since October. They are up 20% this year, in sharp contrast to 2015’s dismal performance when China’s slowdown began to bite.

Whispers of interest in struggling luxury firms also boosted shares of Prada, up more than 6% overnight in Hong Kong.

It was an otherwise forgettable day for markets as the FTSE 100 fell 62.81 points, or 1%, to 6119.59, with some more dismal trade data from China for February.

CMC Markets analyst Michael Hewson said: “A similarly abysmal showing on these numbers will inevitably raise expectations of further easing measures from Chinese authorities.” 

Miners bore the brunt of the poor data, with Anglo American down 51.36p, or 8%, to 576.74p, Rio Tinto off 113p at 2123.5p, and BHP Billiton 43.1p lower at 854.7p.

It was certainly a shock to the system for the sector after yesterday’s leap on the back of iron ore prices soaring 19%, their biggest increase on record.

Shares in CLS Holdings were 46p firmer at 1607p as the FTSE 250 property investor’s annual results showed its adjusted net asset value per share rose 17% to 2083.2p last year. Broker Peel Hunt called CLS “a cheap share” given the discount and said concerns over property sales in Nine Elms are already factored into the share price. 

On AIM, Victoria Carpets improved 36p to 1316p as it confirmed it is in early talks to buy Belgian rival Lano Carpets. 

Also on AIM, podcast site Audioboom slipped 0.25p to 3.25p as annual pre-tax losses widened to £7.4 million. Revenues edged up to just £192,000 as it began to charge for advertising.

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March 9, 2016 |
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