Sharewatch: SMG Falls On Downgrade Rumours

SMG was the media sector’s big mover yesterday, down 11.76% on reports that ABN Amro is to remove the stock from its buy list. Traders believe that ABN has lowered its full year estimates based on a weak advertising outlook.

Last week SMG benefited from the news that Chris Evans has lost his multimillion pound claim for damages against Virgin Radio, after the station sacked him from his breakfast show in June 2001 (see SMG Triumphs Over Evans In High Court Battle).

Cordiant Communications was also in focus yesterday, up 20% after Active Value, the US fund management service, further increased its stake in the troubled advertising group, this time buying 113.4 million shares (see Active Value And Unknown Investor Buy Cordiant Shares). The move may provide a stumbling block to WPP’s plans to take over Cordiant.

Broader market sentiment was seen dented by a jump in the US unemployment rate, which jumped to a nine year high last month and weighed heavily on Wall Street.

The closing prices of media company shares on Thursday were: