Market Report: Cheap share price puts Ocado top of bidders’ shopping lists
Ocado was among the few risers on the FTSE 250 during a day of stock market carnage
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Your support makes all the difference.Ocado’s cheap share price has put the online supermarket top of bidders’ shopping lists. That was the rumour doing the rounds in the City on Thursday, which triggered a buying spree. The company was among the few risers on the FTSE 250 during a day of stock market carnage, and it climbed by 2.9p to 292.2p.
Traders said that with supermarkets on the back foot, now would be a good time to swoop for Ocado. The grocer’s shares have dropped by almost 40 per cent since July amid the growing threat posed by Amazon – which is gearing up to expand its food delivery service in the UK – and concerns about a delayed overseas deal.
Ocado’s chief executive, Tim Steiner, has been open about the threat Amazon poses to his business, so he could look to team up with the $300bn US giant which has plenty of cash to burn.
A deal would require the backing of Nick Roditi, the billionaire hedge fund manager who has a 13 per cent stake. The broker Macquarie slapped an “outperform” rating on Ocado’s stock, playing down the threat of Amazon Fresh, which it claimed was “a way off yet”.
Ocado was a bright spot on dealers’ screens, which were otherwise covered in red as global stock markets took a beating, triggered by a suspension of trading in China. The FTSE 100 index fell by 119.30 points, or 2 per cent, to 5,954.08.
Investors dumped shares in mining companies, which are heavily reliant on demand from China, the world’s largest consumer of raw materials.
Anglo American, last year’s biggest blue-chip faller, continued its losing streak and shed 29.75p to close at 240.65p. Aberdeen Asset Management slumped by 21p to 249p.
Falling commodities prices forced investors to dig into Randgold Resources, the Footsie’s only gold producer, which rose 75p to 4,403p as the precious metal showed signs of regaining the safe-haven status it is historically known for.
Home Retail Group was back among the winners, rising by 3.6p to 136p after reports suggested that Sir Terry Leahy and the US private equity firm Clayton Dubilier & Rice could try to muscle in on Sainsbury’s bid for the Argos owner.
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