Prospects for a DNA sequencing device that is the size of a USB memory stick sent IP Group hurtling up 12, or 11.9pc, to 113p almost a four-year high.
Small-cap IP, which commercialises intellectual property from universities, has a 21.5pc stake in Oxford Nanopore, a spin-out from the University of Oxford that has developed a portable gene sequencing device allowing people to analyse the building blocks of life on the go.
Monday was the first opportunity for investors to respond to Oxford Nanopore presenting its technology at a conference late on Friday, where it unveiled its “MiniON”, a disposable DNA sequencing device the size of a memory stick. The product could make sequencing which can help identify new targets for medicines and illuminate crop science simpler and cheaper.
Analysts at Peel Hunt described the technology as a “game-changer”, which has the “potential to accelerate delivery of personalised medicine to the masses”. They added that $1bn (£630m) was not a “ridiculous valuation” for Oxford Nanopore, but “with supportive private shareholders with deep pockets”, they thought that a flotation “may never happen”. As such, they tipped IP as the “key way to gain exposure to Oxford Nanopore’s value” and raised their target price to 160p from 112p.
Numis analysts went further on Oxford Nanopore’s value, calculating that it could be worth $2bn, or 69p to IP Group’s valuation. They lifted their target price on IP to 129p from 98p and lifted their rating to “buy”.
Back among the blue-chips, miners were hoisting the index higher. China’s move to spur growth by cutting the amount of cash banks must keep in reserve fuelled the miners as investors counted on the metal-hungry country using more raw materials.
Vedanta Resources (EUREX: VR9F.EX - news) rose 46p to £13.58 and iron ore miner Rio Tinto gained 84p to £37.06.
Weir Group (Other OTC: WEIGF.PK - news) , which makes pumps and valves for the mining sector, climbed 135p to £21.86 thanks to a push from Bank of America (NYSE: IKJ - news) -Merrill Lynch (NYSE: MER - news) .
Among other resource stocks, oil producers were fuelled by a spurt in the price of oil after Iran said it had stopped selling crude to British and French companies. BP put on 10.3 to 499¼p. Also lifting the oil giant was the first government settlement involving the Macondo well at the centre of last year’s Gulf of Mexico oil spill. Mitsui’s Moex unit, a minority partner in the well, agreed a $90m settlement on Friday, spurring hopes that BP could yet settle before a trial into claims relating to the disaster begins next week.
The scent of M&A sparked a rise among some smaller oil companies as Friday’s news that Dragon Oil (Xetra: 877789 - news) was considering a tilt at BowLeven (LSE: BLVN.L - news) fuelled hopes that other explorers could attract a suitor. UBS (NYSEArca: DJCI - news) said it expected M&A read-across, although not necessarily with Dragon as a buyer, to be helpful for among others Premier Oil (LSE: PMO.L - news) , Soco International and Heritage Oil (Frankfurt: A0NG6K - news) . Premier (BSE: PREMIER.BO - news) rose 9 to 431.2p while Soco put on 1.6 to 315p, but Heritage eased 0.1 to 188.5p. BowLeven itself fell 1 to 119p.
With miners and oil giants on the march, the FTSE 100 (Euronext: VFTSE.NX - news) climbed 40.18 points to 5,945.25 its highest level in seven months and the FTSE 250 (FTSE: ^FTMC - news) jumped 108 points to 11,420.21. Lifting the market’s spirits were signs that Greece could be close to finalising its bail-out as finance ministers convened in Brussels.
That put a spring in the step of the banks, with Royal Bank of Scotland (LSE: RBS.L - news) gaining 0.88 to 28.48p and Lloyds Banking Group (LSE: LLOY.L - news) rising 0.89 to 36.35p. However, City scribblers remained circumspect ahead of the lenders’ annual results later this week. Nomura kept its “reduce” rating on both RBS and the Black Horse, while Ian Gordon, banking analyst at Investec (Frankfurt: A0J32R - news) , cut his rating on RBS to “hold”. “The house view is that the FTSE 100 will rally to 6,200 this year, and against this benchmark, following its strong year-to-date recovery, we now expect RBS to underperform,” he said. “As such, it is time to take profits take the money and run!”
As traders bought into riskier stocks, defensives missed out. Shire (Stuttgart: A0MMAG - news) lost 26p to £22.52 while Imperial Tobacco (LSE: IMT.L - news) shed 19p to £25.00.
On the second tier, CSR (LSE: CSR.L - news) was the out-and-out winner. Having unveiled plans to lift its dividend and buy back $50m of shares, the maker of microchips shot up 47.3 to 275p. Not far behind was Misys (Xetra: 944235.DE - news) , up 20½ to 330.1p. The software provider is already in talks about merging with Swiss peer Temenos, but Misys said yesterday that it had received a rival approach said to be worth £1.2bn from Vista Equity Partners.
Gaining ground too were a raft of housebuilders, with Persimmon (LSE: PSN.L - news) up 21 to 609p, Barratt Developments 5.1 higher at 130p and Taylor Wimpey (Dusseldorf: 408518.DU - news) rising 1.8 to 48¾p. Landlord Segro advanced 5.9 to 236.7p after selling five industrial estates to funds owned by Ignis Asset Management for £80.2m.
But traders lost their taste for The Restaurant Group . Having been cut to “reduce” by Numis, the owner of Frankie & Benny’s and Garfunkel’s slipped 5½ to 304.2p. “Trading during the last six weeks will not have been helped by increasing competition and unemployment as well as a 14.6pc decline in cinema box office takings,” said analysts.
Inmarsat (EUREX: ISAF.EX - news) loses ground over US deal payment
Inmarsat lost altitude as the satellite operator said that its American partner, LightSquared, had not paid a $56.3m (£35.5m) instalment due to the British company. Inmarsat, which is building a US mobile broadband service with Inmarsat’s spectrum, said it was scheduled to receive the payment from LightSquared after the completion of the first phase of their agreement. However, LightSquared said it had raised “several matters that require resolution before the first phase comes to a close”, adding that the terms of the agreement allow for additional time to resolve pending questions before the final payment is due. Inmarsat said its core business, which provides communications to shipping, aircraft and remote locations worldwide, was unaffected. But it shed 5.5 to 477.1p.
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Hopes for gene analysis device lift IP Group
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