Newspaper article The Evening Standard (London, England)

Citigroup Gives UK Economy a Boost with Peppy View; MARKET ROUND-UP

Newspaper article The Evening Standard (London, England)

Citigroup Gives UK Economy a Boost with Peppy View; MARKET ROUND-UP

Article excerpt

Byline: Mickey Clark

TOP broker Citigroup likes the view of the UK economy from its Canary Wharf offices which dominate the London skyline.

It is upbeat about the outlook for investors and describes European equities as not expensive and very attractive relative to other assets classes. They are also still cheaper compared with government bonds than they were back in March 2003.

In its quest for steady income, Citigroup is pointing investors in the direction of telecom shares and insurance companies which look cheap compared with utilities and banks.

Those UK companies at the top of its shopping list, include the mobile phone giant Vodafone, 3/4p firmer at 1401/4p, and mining outfit BHP, 27p higher at 18231/2p, which both boast resilient dividend policies and "excess capital".

Citigroup says UK equities still look attractive on a dividend basis, especially relative to other assets.

Those companies with dividend yields of 3%, or more, decent dividend cover and balance sheets include drugs giant GlaxoSmithKline, down 141/2p at 1236p, Reckitt Benckiser, 6p dearer at 3056p, Next, up 17p at 1855p, Sage, 13/4p better at 230p, and metal basher IMI, up 63/4p at 4721/2p. That pep talk from Citigroup and a strong finish to trading on Wall Street last night set the tone for trading in London this morning where leading shares were able to claw back some of yesterday's losses.

The FTSE 100 index responded with a rise of 44.64 at 5252.00.

But overall trading conditions remained thin with investors waiting to see if the economy has officially emerged from recession to join France, Germany and Japan.

BSkyB also boosted sentiment with better-than-expected first-quarter numbers. The satellite broadcaster responded with a rise of 20p to 5791/2p. Mining shares made much of the early running as investors took advantage of yesterday's sell-off to try and pick-up stock on the cheap. Kazakhmys responded with a rise of 41p to 1293p, while Anglo American put on 50p at 2335p and Vedanta Resources added 51p at 2337p.

Speculators continued to take profits at J Sainsbury with the price drifting 4p to 338p, making it one of the biggest blue chip casualties on the day. …

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