A BROKER'S recommendation helped Energy Group secure pole position among the day's best performers in the FTSE 100. Shares in the group, which was demerged from Hanson last month, rose l8p or 3.2 per cent to 489 1/2p, in trade of 6.3 million. US investment bank Goldman Sachs was behind yesterday's sharp move. The bank upgraded its recommendation from "market outperformer" to "recommended".
In a note to clients, analyst Mr Philip Green said: "In our view the shares are significantly undervalued in fundamental terms offering 27 per cent upside to fair value against the current share price of 471p (the price of the shares when the note was issued)."
Goldman said its fair value share price target remains 597p - which takes account of the recently announced proposed acquisition of Citizens Lehman Power (CLP), the US power trading company. Hanson shares closed 1 1/2p lighter at 288p, in trade of 9.9 million.
Among the rest of the electricity stocks, National Power ended the session 2p ahead at 477p, and Northern Ireland Electricity was also in demand, closing 2 1/2p up at 366 1/2p.
Financials opened stronger to build on Tuesday's gains and although there was some weakness later in the day banks and composite insurers again figured among the day's best performers.
Institutional investors, many of whom are underweight in the banking sector, were said to be taking advantage of recent underperformance to build up their positions.
BAT Industries made gains for the fourth successive day, adding 5 1/2p to close at 533 1/2p. The share fell to 489p on March 20th.
Favourable figures from clothes' retailer Next helped the shares jump 22 1/2p to 618 1/2p. The company reported a 25 per cent increase in full year profits to £156.1 million profit for the year to the end of January. The figures topped a consensus forecast among London brokers of £154.4 million before exceptional items.
The better than expected figures from Next boosted several other retail stocks. They included Marks & Spencer whose shares advanced 17 1/2p to 481 1/2p. However reports that SBC Warburg had downgraded its recommendation on Storehouse from a "buy" to "hold" and reduced its current year estimate, made the stock the day's worst performer in the FTSE 100. The shares surrendered 10p, to 235 1/2p.
The agreed bid for World of Leather from UNO, saw the former race up 30p to 121 1/2p and the latter up 24p at 295p.
Pharmaceuticals group Medeva fell 2 1/2p to 310 1/2p after NatWest Securities urged investors to "reduce" holdings.
News that N. Brown Investments had pulled out of the proposed acquisition of Sears' Freemans mail order business, saw Sears shares decline 1 1/2p to 74 1/2p but boosted N. Brown 10p to 387 1/2p.
