Market Report: Carillion blasts bears out of market after it lands £1.7 billon in contracts

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Short-sellers weren’t looking so clever after an 8% spike from Carillion.

A reassuring update from the FTSE 250 construction firm, up 23.6p to 325.3p, kept the bears at bay.

It revealed contract wins to the tune of £1.7 billion since the end of June, including being selected to build the Great Arundel Court development near Temple.

The bears have been betting heavily against the construction firm ever since it abandoned its merger with Balfour Beatty last August. 

At the time, less than 2% of its shares were out on loan to hedge funds betting on the share price falling.

Just over a year on, it is the most shorted stock on the London Stock Exchange, with around 90 million or 19% of its 430 million shares out on loan to short-sellers.

The fact that hedge funds have not closed their short positions after the recent share price falls suggests “they are holding out for more losses in the stock”, according to Karl Loomes, analyst at SunGard’s Astec Analytics.

It was a quiet start for European stock markets with Wall Street closed for Columbus Day.

Blue-chips looked set to end their eight-day winning streak as the FTSE 100 retreated 31.01 points to 6385.15, with Rolls-Royce the heaviest faller, down 31.5p at 724p, on reports EU regulators could probe the servicing contracts manufacturers have with airlines.

Investec cut its rating on Standard Chartered rating from Buy to Hold and shares obligingly fell 17p to 769.7p, ending a strong run from the Asia-focused bank’s shares.


Challenges: StanChart, which sponsors Liverpool, faces uncertainty like Jürgen Klopp

Oil services firm Smiths Group surged 36p to 1061p after Jim Ratcliffe’s chemicals giant Ineos splashed out on 12 North Sea gasfields despite the oil and gas sector’s well-documented downturn.

Car insurer Hastings Insurance reversed on its stock market debut, down at 167.43p after floating at 170p. 

The game of musical chairs at Sefton Resources has put off a broker from becoming its nomad and shares plunged 40%, or 0.02p, to 0.03p.

Investors in the oil minnow forced chief financial officer Raylene Whitford to quit, which prompted existing nomad Allenby Capital to hand in its notice.

It will leave when proposed new directors, including Clem Chambers who runs bulletin board and trading site ADVFN, join.

The clock is now ticking for the company to find a broker willing to oversee its activities or its shares will be cancelled from AIM.

Elsewhere, National Accident Helpline owner NAHL Group dropped 13.38p to 366.74p after raising £14.2 million in a discounted share placing to fund the £25 million acquisition of injury rehabilitation specialist Bush & Company.

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October 12, 2015 |
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