Newspaper article The Evening Standard (London, England)

Worry over American Deal Adds to BA's Growing Woes; MARKET ROUND-UP

Newspaper article The Evening Standard (London, England)

Worry over American Deal Adds to BA's Growing Woes; MARKET ROUND-UP

Article excerpt

Byline: Rosamund Urwin

WITH strikes, snow and now worries over its alliance with American Airlines, British Airways boss Willie Walsh faces a bleak Christmas and a distinctly unhappy new year.

Britain's flag carrier was the worst performer on the top flight today, after it emerged that the US Department of Justice is recommending substantial concessions in return for allowing the partnership to go ahead.

Shares in the loss-making airline, which is currently facing another strike ballot from its cabin crew, skidded 21/2p to 1901/2p. To add to its problems, the US authorities have warned that the deal with American Airlines would harm competition on transatlantic routes. To win approval, therefore, the two airlines must give up some of their takeoff and landing slots or make some routes exempt from the tie-up.

Shares in London climbed in very light trading, with the FTSE 100 putting on 57.60 points to 5351.59. One trader said: "It's the typical end-of-year rally, based on not very much."

Cairn Energy took first place on the winners board for the second day running, up 12p at 3303/4p, as investors digested news that the oil explorer was bringing forward drilling in Greenland by a year and its shares became easier to trade.

The oil explorer's shares have been split in 10 to increase liquidity of the shares. Cairn also found a fan in Deutsche Bank, whose analysts raised their price target for the shares from 324p to 341p.

Other oil stocks climbed after the OPEC oil cartel agreed to leave their production targets unchanged.

Royal Dutch Shell soared 481/2p to 18151/2p and BP shot up 9p to 600p.

A state-owned Chinese oil company is said to be the most likely buyer of Shell's Nigerian oil field. Meanwhile, the titan of black gold said it is still considering energy projects in the Gulf state and further afield.

Earlier this month, Shell ended talks on joining a $9 billion ([pounds sterling]5.6 billion) joint venture refinery and petrochemical project in China.

Aggreko bounced back from yesterday's losses as Bank of America Merrill Lynch advised snapping up its shares. The temporary power provider soared 141/2p to 9011/2p as the broking heavyweight raised its earnings forecasts for the group for this financial year and next. …

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