June 19--Star fund manager Neil Woodford, the nearest thing to a household name in the City, today officially launches his CF Woodford Equity Income Fund.
He has promised his loyal supporters that the new portfolio will feature many of the names he has held over the past 25 years at
Woodford's Invesco Perpetual High Income Fund was the best performing fund in the equity sector for years under his management, turning a pounds sterling 10,000 investment into pounds sterling 230,000. His track record was exceptional.
It was therefore no real surprise to see after his shock decision to resign from Invesco to go solo investors withdrew an estimated pounds sterling 4.6bn from Woodford's fund as they awaited his new 'baby' to be given the green light. In the meantime, they have been allocating cash during an offer period.
Woodford has always taken a fancy to the tobacco sector and dealers yesterday said it was no coincidence to see both UK giants make good progress amid suggestions his new fund was active in the market. Bats was puffed up to 3578.5p at one stage before closing 2.5p easier at 3542p.
Imperial Tobacco rose 17p to 2656p. It recently announced its intention to float Logista, its wholly-owned distribution division, in Spain. The unit accounts for 5pc of group profits. Broker Panmure Gordon estimates the potential valuation range being pounds sterling 1.1bn to pounds sterling 1.5bn. Assuming Imps retains a 51pc stake, this would indicate potential cash generation of pounds sterling 540m to pounds sterling 720m. Woodford in the past championed pharmaceuticals when many other fund managers would not touch them with a barge pole.
Shire remained popular on persisting US takeover talk following a Reuters report that investment bank Citigate has been hired to man the group's defences against a possible corporate attack. As vague rumours of a possible blockbuster bid from Allegen did the rounds, the shares jumped 125p more making a two-day leap of 249p to 3785p.
Quietly firm trading conditions prevailed in London and the Footsie rose 11.79 points to 6,778.56 as dealers awaited the outcome of the latest two-day Federal Open Market Committee meeting. The Fed was expected to continue its tapering of its monthly bond purchases by a further $10bn to $35bn, but traders were more interested to hear any clues as to the timing of the first increase in the official fed funds rate. Wall Street closed 98.13 points up at 16,906.62. Superdry fashion company
A Shore Capital sell recommendation dragged Wm Morrison down 1.7p to 190.9p. The beleaguered supermarket on Tuesday announced a review of its store operations and 2,600 store managers are likely to lose their jobs. Analyst Clive Black is concerned about trading momentum. It will take some time for the new strategy to be assessed by customers as real or 'puff'.
FTSE 250 stock
Instrumentation and controls company
Reneuron, the stem cell treatment developer, edged up 0.12p to 3.02p following a trading statement. Although losses increased to pounds sterling 7.1m in the year to end-March, the company said it still had plenty of cash following its pounds sterling 23.44m fundraising in August 2013.
Profit-taking following excellent results from the long-awaited ruby auction left
Research from Capita Asset Services reveals investors have been filling their boots with shares over the past 12 months. Holdings in UK equities have reached pounds sterling 238.8bn, a post financial crisis record and only 3.5pc below the all-time record of pounds sterling 247.3bn attained exactly seven years ago in 2007. Capita expects record dividends of pounds sterling 11.3bn to be paid to private investors in 2014. Over the last seven years, private investors have reaped an astonishing pounds sterling 58.3bn in dividends.