Oil, carpets and integration

Tuesday 15 December 2015

The headline index enjoyed an early morning bounce after dropping to a three-year low by close of play yesterday with canny investors snapping up value plays.

“Eternal optimists have been struggling to find positives in the oil sector recently but oilfield services group Petrofac (LSE:PFC) remains  relatively bullish against a backcloth of a difficult period for the industry,” says AJ Bell Investment Director Russ Mould.

“Petrofac was buoyed by two contract extensions yesterday worth around $400m and investors will be further encouraged by the steps it has taken to maintain cost-effectiveness and sustain its strong competitive position. 

“Carpetright’s (LSE:CPR) shares showed strong early gains on the back of significant first half growth with underlying profit up 34.3%. The group continued its positive like-for-like sales performance and saw further progress on a wide-ranging programme of initiatives to extend its appeal.

“AVEVA’s (LSE:AVV) shares plunged after merger talks with Schneider Electric (EURONEXT:SU) were terminated. A deal would have reduced AVEVA’s exposure to the oil and gas markets but due diligence has identified significant integration challenges which meant the anticipated uplift in shareholder value was unlikely to have been realised.”

These articles are for information purposes only and are not a personal recommendation or advice.