British Telecom’s mmO2 mobile phone unit made a strong start in its first conditional deals this morning.
The derivative stock rose to a premium on yesterday's grey market price, dealers said.
At 9 a.m., the mmO2 "when issued" stock was changing hands at 74p, its session high so far. It traded as low as 68p in its opening deals.
This compares to yesterday's closing grey market price of 63p per share.
Volume was lively, with more than 111 million traded. Dealers suggested interest from hedge-fund buying was contributing to the interest, with trading in mm02 accounting for around three-quarters of the total market.
The rump derivative issue, BT Group, was barely traded at 265p in "when issued" trade. BT's closing price yesterday of 328p yields an implied price for BT Group of 265 pence per share, analysts noted.
Unconditional trading in both issues is due to start on November 19th.
Analysts said today's deals will provide long-awaited transparency, giving a market value for both and a read-across valuation for the combination "old BT".
In a note to clients this morning, UBS Warburg set a price objective for mm02 of 80p, and recommended a "buy" on restructuring potential for the group.
AFP