Size isn’t everything, according to Jefferies, especially when it comes to advertising. The broker’s David Reynolds reckons that the recent ad land mega-merger of Publicis and Omnicom won’t be enough to take on Sir Martin Sorrell’s WPP where it counts — China.
Reynolds points out that the Red Dragon is the world’s fastest-growing advertising market, set to be worth about $80 billion (£51 billion) by 2016. He says WPP has a competitive advantage there given its focus on “local account wins first, rather than localised servicing of global accounts”.
Though a fully merged Publicis Omnicom may pose a bigger threat globally, in China it is “neither big enough nor good enough to challenge WPP”. Reynolds rates WPP a Buy, and Citibank also upped its target price. The group rose 3p to 1236p.
Investec’s analysts are cautiously optimistic about Pearson. The group is largely unchanged in the wake of first-half results and the deconsolidation of Penguin but Steve Liechti at the broker says new chief executive John Fallon’s more aggressive approach to digital is promising. Pearson was flat at 1278p.
Miners continued their rally today after strong numbers from China’s construction sector yesterday. Fresnillo rose 29p to 1307p, Glencore Xstrata climbed 1.4p to 313.4p, ENRC put on 0.8p to 229.3p and Rio Tinto jumped 11.5p to 3070.75p.
Despite strong figures from both China and the UK’s service sectors — and news that August was the best month in two years for eurozone businesses — the benchmark index was depressed by continued uncertainty over Syria. The FTSE 100 was down 29.46 points at 6438.95.
The index was also dragged down by turbulence in the travel sector, which was dealt a nasty shock after a profit warning from the normally bullish Ryanair. The budget airline plunged €0.92 to €5.86, and easyJet nosedived 93.6p to 1186.4p, British Airways owner IAG dropped 11.4p to 283.3p.
Goldman Sachs thinks mobile money — paying via smartphone — is coming of age and highlighted Monitise as a winner. The AIM-listed business rose 3.75p to 49.5p.
Elsewhere on AIM, Wishbone Gold, the latest venture of entrepreneur Richard Poulden, saw shares climb after finding high grade gold at its 4800 hectare White Mountain project in Australia. Wishbone dug up 0.25p to 2.87p.
