Merchant shares get a boost

Published:  05 August, 2009

LONDON: Shares in BSS Group rose 7.98% to 293.7p helped by an upgrade from sell to hold by investment advisor Numis.

Numis believes the BSS share price has been left behind compared to other merchants in the sector and upgraded its recommendation to add from hold.

Numis said: "We accept that BSS should not trade on the same rating as early cycle stocks such as Galiform and Travis Perkins. However, the fact that the group is trading on a material discount to the late cycle plays seems harsh."

Merchant share trading saw Travis Perkins down 2.41% to 810p and Wolseley down 2.96% to £13.44.†

Analysts have speculated about bids in the builders' merchant sector following the recent purchase of a stake in SIG by a Canadian insulation supplier and fund raisings by Wolseley, Saint Gobain, and Travis Perkins.

However, Wolseley and Saint Gobain remain focused on conserving cash rather than making new acquisitions while analysts think Travis will baulk at attempting to absorb BSS group making a bid unlikely.

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