Newspaper article The Evening Standard (London, England)

Oil the City Slicker after Paladin Bid Fuels Surge; MARKET REPORT

Newspaper article The Evening Standard (London, England)

Oil the City Slicker after Paladin Bid Fuels Surge; MARKET REPORT

Article excerpt

Byline: MICKEY CLARK

SHARES were quickly on the recovery track following yesterday's sell-off marking the 18th anniversary of Black Monday.

The FTSE 100 index, which yesterday slumped to its lowest levels since the 7 July London bombings, rallied 42.5 points to 5210.3.

It was underpinned by a strong bounce on Wall Street overnight where investors were cheered by a clutch of bullish trading statements from the likes of Motorola, JPMorgan Chase and Yahoo.

The Federal Reserve also had some positive comments to make on the US economy and that helped drive up the Dow 128 points. Far East markets also recovered their poise.

Sentiment in London was further bolstered by better-than-expected retail sales numbers, although brokers were quick to point out the overall trend remains weak in the run-up to the all-important Christmas period.

Oil shares led the way, fuelled by news of a [pounds sterling]1.2 billion bid for Paladin Resources, up 753/4p at 3503/4p.

The bid, worth 355p a share, is being made by Toronto-listed Talisman Energy.

Broker ABN Amro has maintained its add rating on Paladin and told clients it believes this is the start of a "wave of consolidation" in the sector. The broker said this deal suggests its peers should be on higher ratings, calculating its valuation on Tullow Oil would increase to over 300p a share, and on Dana Petroleum to more than 950p a share.

Naturally, the deal focused attention on the other independent oil explorers. The story was also spiced up by claims Royal Dutch Shell, up 21p at 1783p, is looking to bid for Canadian oil company Encana.

Cairn Energy bounced back from yesterday's steep fall with a leap of 123p to 1715p.

There were also gains for BG, 18p better at 489p, Tullow Oil 181/2p to 2371/4p, Dana Petroleum 591/2p to 8301/2p, Venture Production 37p to 482p, and Burren Energy 541/2p to 775p.

AIM- listed oil explorer BowLeven also rallied 70p to 465p.

Its shares plunged around 40% yesterday after the company admitted that test drilling at its project in Biafra had failed to discover oil.

The company raised an extra [pounds sterling]55 million by way of a share placing at 650p earlier this year. …

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