Print Published 13th Dec 2016, 20:21

Sector share prices: 12 December 2016

MSFI Index 12Dec16

Last month’s depressing account of how poorly the marketing industry had fared on the stock market by comparison with the FTSE All-Share Index seems to have encouraged investors to take advantage of what they may have perceived as undervalued stocks.

In the month to 12 December the sector’s MSFI Index improved by 6.03% while the FTSE All-Share Index could manage only a more modest 2.21% improvement.   But before jumping to any hasty conclusion it is worth noting that the sector’s share prices tend to fluctuate more widely than those of the market as a whole.

Two-thirds of the marketing companies listed on the stock exchange enjoyed an improved share price.    Among them was Zinc Media (formerly Ten Alps) where a modest capital raising exercise and the divestment of some  loss-making activities seemed enough to counter the gloom that followed a £6.4 million  loss (see Ten Alps loses £6.4m after publishing write-downs).

Another factor influencing the sector upswing was the offer from the Isle of Man offshore fund manager DBAY Advisors to acquire Creston for £75 million (see Isle of Man fund manager bids £75m for Creston).  Not surprisingly that proposal pushed Creston’s shares up to the offer price of 125p.

More surprisingly, digital marketing group Jaywing saw its share price rise by 24.1% in a month despite reporting a post-tax loss of £384,000, due primarily to £850,000 spent on costs associated with two acquisitions (see Jaywing’s acquisition-related expenses wipe out profit) .  Clearly the stock market took a similar view about those costs as the company, namely that they did not affect the underlying profitability of the business.

There were a few shares that bucked the upward trend:  Global Data suffered a reversal of its long-running price rise and slipped 8%.  Shares in Next Fifteen Communications Group also lost ground by 5.9% for no obvious reason.   And there were smaller falls in the share prices of Crossrider, Huntsworth, Matomy Media Group and St Ives.

sector share prices 12Dec16