MARKET REPORT: Finally some New Year cheer for WPP investors

WPP bounced back yesterday after speculation that a division of market research firm Kantar, which it co-owns, could be sold.

Shares in WPP collapsed over the past year as it struggled with technology clients cutting their spending budgets.

In recent months, boss Mark Read has been forced to announce dismal results after WPP felt the full force of an economic downturn last year.

But investors were cheered yesterday by reports from Sky that market research company Kantar could auction its Kantar Media division.

Investors breathed a sigh of relief at the prospect of a cash windfall for the beleaguered company.

The unit, which runs UK television audience measurement system Barb, could be worth as much as £1 billion, according to reports.

WPP has a 40 percent stake in Kantar, meaning a sale could raise an equivalent £400 million. The remaining 60 percent is owned by the private investment company Bain Capital.

Shares in WPP rose 3.8 percent, or 28p, to 770.2p, making it the best performer on the FTSE 100, which lost 0.4 percent, or 33.46 points, to 7,689.61. The FTSE 250, meanwhile, lost 0.8 percent, or 161.66 points, to 19210.39.

While it stuck with the FTSE 250, unrest in the Middle East paved the way for shipping broker Clarkson to raise its profit forecasts yesterday as it topped the midcap index.

More ships are being chartered as transport companies try to avoid the Red Sea, where attacks on boats belonging to Houthi rebels in Yemen have increased.

Shipping companies have had to arrange longer voyages to avoid using the Suez Canal, where tensions have flared following the war between Israel and Hamas.

While Clarkson did not directly acknowledge the conflict, a spokesperson said there was “strong trading during the last quarter (particularly from the brokerage department).”

The company, the world's largest provider of shipping services, will report annual results in March. Shares in Clarkson rose 6.6 percent, or 215p, to 3480p.

It comes a day after the boss of Next, one of the High Street's most recognizable fashion chains, warned that stock deliveries would be delayed by the attacks.

Lord Wolfson had said this was likely to delay the shares' arrival in Britain by a fortnight and could result in 'moderate selling' if the disruption continued.

His company's shares took a hit yesterday after HSBC downgraded the stock from a 'buy' to a 'hold'.

The update saw shares fall 1 percent, or 84p, to 8466p.

Brokers at HSBC pointed to uncertainty over the impact of rate cuts or “potential for prolonged disruptions to the Suez Canal” beyond the current first quarter.

And oil prices continued to rise, by more than $1 to $78, amid turbulence on Red Sea shipping lanes.

Russ Mould, investment director at broker AJ Bell, said: 'Higher oil prices and any difficulties in transporting goods to major locations are both important inflation drivers and are obviously raising market concerns that rate cuts may not happen until the future.'

Investors often worry when directors sell a lot of shares.

That does not apply to Ascential. Ascential shares barely moved, despite finance director Mandy Gradden selling £2.45 million worth of shares. She sold 850,000 shares for 288 cents each. Ascential rose 0.1 percent, or 0.2p, to 292.4p.

But it seems there is no end in sight to the hospitality industry's woes, with Revolution Bars announcing the closure of eight bars in England. Shares fell 21.1 per cent, or 1.15p, to 4.3p, adding to a fall of 41.3p over the past year.