Hedge fund management group Man is on the rise, up 12.5p to 252.5p after the latest figures from its key AHL fund.
The fund was up 2.45% last week and is showing a 14.6% increase over the last twelve months. Analysts at Singer Capital Markets issued a buy recommendation with a 400p price target. They said:
"AHL fund will have now generated around $100m of pre-tax profit in the second half already (which meets our second half estimates). A number of analyst estimates have predicted no performance fees for the second half so earnings momentum will be positive from here since performance fees from AHL are paid weekly/monthly and cannot be given back.
"For every additional 1% of positive performance from here, AHL will contribute $38m to group pre-tax profit. Man is trading on current year P/E of 6.4 times falling to 5.8 times March 2010 estimates, and it yields 12.4%. With the collection of performance fees and $1.5bn of excess cash balances we feel this dividend is underpinned to be maintained this year."
With Wall Street forecast to open lower - after a gloomy outlook from Blackberry maker Research in Motion and news that US private employers had cut 250,000 jobs in November, 50,000 more than forecast - the FTSE 100 is now down 75.14 points at 4047.72.
Still, analysts at UBS have made the - perhaps heroic - prediction that the leading index could reach 5800 next year. They said:
"A modest recovery multiple is justified on the back of the policy action we have seen. On 13 times earnings, the FTSE 100 is capable of rising to 5,800, but it is not going to be easy with volatility and earnings momentum weighing on the market. "
To put that in context, the FTSE 100 has fallen from a high of 6730.7 in October 2007 - before the credit crunch really began to frighten investors - to its current lowly level. A rise to 5800 would take it back to the level of mid-June this year.
