UK - Institutional investors have shown growing confidence in Marconi over the last three months with several fund managers increasing their investment, a new report shows
UBS Asset Management has increased its investment in the company from just under 70m shares in July to almost 106m shares by August 7 with ING Investment Management buying another 0.01% of the firm in the same period.
The new confidence comes as Marconi’s short to medium term future looks assured. Credit lines remain open, hedge fund managers are closing their short positions – a sure indication that they think the price will begin to rise – and analysts are beginning to issue buy recommendations.
ING Barings IT hardware analyst Michael Blogg said: “The hatches are well and truly battened down at Marconi with determined efforts being made to sell non-core assets and to focus continuing capital expenditure on a much more closely defined range of products.
Blogg added: “The banks have been generous in giving them credit facilities which, I believe, will be more than enough to see them through.”ING Barings has issued a strong buy recommendation on Marconi shares and posted a 12 month target price of 53p – a price that may make the company an attractive takeover target.
Blogg added that a takeover bid was still a possibility but this was unlikely in the short term as many firms are suffering similar problems. He said: ”At some stage [a takeover] is possible and the more Marconi focuses their business the more likely it is.”
Pension scheme managers with large investments in Marconi however may well remain deeply disappointed with the firm that has performed so badly in the last three months and hit new lows of around 28p.
BT pension scheme chief pensions officer Colin Hartridge-Price said: “Any fall in asset value is unwelcome. The fall in the technology sector has been particularly hard – especially so in Marconi.”
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