Market Report: InterContinental Hotel shareholders 'set for major windfall'

InterContinental Hotel shareholders could be set for a major windfall this year. The hotel group jumped to the top of the index after an upgrade from the boutique investment bank Bryan, Garnier yesterday.

The bank thinks IHG, up 71p to 1,937p, could return up to $300m (£182m) to investors this year. The prediction came as IHG announced a share buyback in the US.

Barclays gave its verdict on the two state-backed banks yesterday, favouring Lloyds over Royal Bank of Scotland. While Lloyds is not cheap, down 1.38p at 77.37p, Barclays thinks it still offers good value, with good dividends likely in the medium term.

RBS, meanwhile, is taking a “longer, harder road” that is “highly dependent on the successful execution of an ambitious cost reduction plan”. It fell 6.2p to 299.1p.

HSBC initiated coverage of Royal Mail, up 6.5p to 581.5p, with an overweight rating. The bank thinks modernisation of sorting equipment and IT systems has bought stability and thinks investors could soon benefit from property sell-offs, a source of contention during last year’s float.

Anglo American added 28p to 1,439.5p after moving closer to ending ongoing strikes at its South African platinum mines. The company’s annual report also revealed Mark Cutifani, the chief executive, took home £891,000 in basic pay and £1.2m in shares and bonuses last year.

The wider mining sector enjoyed a rally amid speculation that metal-hungry China is set to introduce further stimulus measures to prop up its economy. Miners added 6.6 points to the FTSE 100, which closed up 14.73 points at 6,557.17.

Mid-cap builder Balfour Beatty, down 6.2p at 276.2p, announced a £200m deal in Dubai to connect the world’s largest shopping centre, Dubai Mall, with the world’s tallest building, Burj Khalifa.

XLMedia, which creates websites to generate leads for online gamblers, raised £41.8m on its AIM debut, jumping to 66.5p from its offering price of 49p.

Digital voucher company Eagle Eye announced plans to raise £6m on AIM today, in a flotation that would value the company at around £30m.