Daily Mail, London, market report column [Daily Mail, London]
(Daily Mail (London, England) Via Acquire Media NewsEdge) May 04--BUYERS saddled up at Betfair on hearing that it has been given a sports betting license in Schleswig-Holstein, the northern most of the 16 states of Germany.
Shares of the online betting exchange galloped 45.75p ahead to 840.25p as the news helped allay bear case fears that the company cannot get licensed outside of the UK.
Betfair was floated at pounds sterling 13 in October 2010.
It is one of only three licenses awarded by the German state to operate its betting exchange, as well as other sports products. Betfair will use this to operate throughout the whole of Germany, paying 20pc gross profit tax (GPT) to Schleswig-Holstein.
Schleswig-Holstein's laws demand a 20pc GPT rather than a more punitive tax on turnover, and also allow for online casino-style gambling, which the other states want to ban. Broker BarCap estimated that the tax payment would equate to about pounds sterling 3m, or about 3pc of core Betfair earnings. It has been estimated that the largely illegal German sports betting market is worth at least pounds sterling 41bn.
Exane BNP Paribas advised clients to buy Betfair and Bwin Party, which sees 20pc of sales from Germany. The close was 5.7p better at 156.1p.
The Footsie kept its head above water with a gain of 8.44 points at 5,766.55, while the FTSE 250 firmed 7.42 points to 11,483.31. As expected the European Central Bank kept interest rates at 1pc, but boss Mario Draghi disappointed some operators by rejecting any plans for further long-term refinancing operations (LTROs) in the short term.
Wall Street traded 83.55 points lower at 13,185.00 in the early stages despite an unexpected drop in jobless claims ahead of today's crucial non-farm payroll (employment) report. Initial claims for state unemployment benefits dropped 27,000 to a seasonally adjusted 365,000, the biggest weekly drop since May 2011.
Bulls will be pleased to hear that Investec's economist Philip Shaw reckons more quantitative easing is just around the corner. He expects the Bank of England's Monetary Policy Committee will next Thursday sanction a further pounds sterling 25bn of QE, which would take the asset purchase target to pounds sterling 350bn.
'That would leave the MPC in a good position to end the latest round of QE in August if things do improve, or to continue its programme should economic conditions deteriorate further,' says Shaw.
Royal Bank of Scotland drifted 0.22p lower to 24.55p ahead of today's first-quarter trading statement.
Software and computer services group Invensys added 3.4p to 216p as AB&B was added to the list of potential bidders which already includes Siemens and Chinese rail group, China Southern Rail.
Reflecting bullish feedback from the group's Capital Markets Day in London, hosted by chief executive Rakesh Bhasin, COLT Telecom Group jumped 6.5p to 119.2p. The audience was apparently told COLT has a five-year strategic plan with a goal to deliver profitable and sustainable growth to 2016 and beyond.
Imagination Technologies, which designs the Intellectual Property (IP) for chips that go into iPhones and so on, advanced 17.5p to 662.5p after announcing the signing of a licence agreement with HiSilicon Technologies. The agreement covers multiple PowerVR multimedia IP cores, including graphics, video and display technologies. HiSilicon is the chip design division of Chinese technology giant Huawei, which shipped 20m smartphones in 2011.
Struggling electricals retailer Kesa Electricals touched 61.598p before closing 0.95p better at 56.95p. It has sold Darty Telecom, comprising Darty Box and Darty mobile, their fixed line, broadband, TV and mobile service for euro 40m to France's Bouyges Telecom. It will reinvest the cash in its core business.
Renewed selling in the wake of Wednesday's dire results and the board's decision to pass the final dividend, dragged Argos-to-Homebase group Home Retail down 4.2p further to 83.35p.
Worries that continued opposition from 19pc shareholder Orbis could yet force Vodafone (1p dearer at 173p) to walk away from its 38p a share offer for Cable & Wireless Worldwide left the latter 0.9p easier at 32.95p.
A Peel Hunt upgrade to buy from hold on recovery hopes and target price of 105p helped IT services group Logica improve to 80.25p before closing 0.75p up at 77.7p.
Provident Financial added 4p at 1204p following a solid first-quarter trading update. It plans to pilot a non-standard credit card in Poland during 2012 at a cost of pounds sterling 3m. Shore Capital advises clients to buy for the attractive dividend yield which it believes is capable of growing in the mid-high single digit range over the next few years.
PROPERTY website Rightmove rose 21p to a 52-week peak of 1600p after Panmure Gordon hiked its target price to 1780p from pounds sterling 13 ahead of Wednesday's AGM trading update. Analyst Alex DeGroote upgraded because the group is proving itself capable of low-20s earnings per share growth per annum without any growth in volume or clients. Returns remain very high, with no signs of latent cost pressure.
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