Market report: Friday close

UBS has put insurance heavyweight

In a note to clients, UBS pointed out that RSA's earnings and net asset value forecasts have been hit by the move to International Financial Reporting Standards. Lehman Brothers also took a knife to RSA, trimming its target to 79p from 82p while repeating its underweight rating.

Despite yesterday's announcement, alongside the results, that it plans to sell its US motor insurance arm, Lehman sees no easy solution to RSA's problems in America. The insurer fell 1½p to 82½p.

The FTSE 100 index, up 19.9 at 4982.0, held on to its gains despite a poor opening on Wall Street. US investors were spooked by the second-highest trade deficit on record, sending the Dow Jones Average down around 10800.

Takeover rumours heated up interest in contract caterer Compass, pushing it 6¼p higher to 261¼p. One of the big US buyout groups, such as Texas Pacific, is seen as the most likely buyer although an approach might not happen until after the group's results in May.

Deutsche Bank also reckons that worries about UK margins have been overdone and upgraded its recommendation to buy from hold.

Furniture foam maker British Vita firmed 7p to 347p after Texas Pacific hinted it may raise its 353p offer. The Americans said they would 'discuss with British Vita the level of any definitive offer' after carrying out a 'short period of due diligence'.

Schroders jumped6p to 781p thanks to a positive note from CSFB. The broker has upped its earnings per share estimate for the current year by 17% to 39.8p.

Expectations of strong results from Bovis Homes on Monday helped the housebuilder jump 33½p to 695½p, and raised the rest of the sector. Redrow, up 15½p at 405p, Bellway 24½p ahead at 855p, and Wilson Bowden, 41p stronger at 1215½p, were all in demand.

Stunning first-time results from Catlin propelled the insurer up 17p to 370p. Beating earnings and dividends expectations means the group, which floated last April, can expect a raft of analyst upgrades. That is not the case for reinsurance broker Benfield, whose full-year profits disappointed investors. The shares dived 17p to 258p.

Rumours of a share issue for Biofuels proved well-founded as the eco-friendly energy group said it was placing almost 11m new shares at 230p with existing shareholders, together with a firm placing of 3.3m shares, making £33m in gross proceeds.

Biofuels, up 39p at a new high of 300½p, also revealed a new £22m credit facility with Barclays that should see it through to the completion of its first eco-diesel plant in Teesside and allow it to start building a second.

Boss Sean Sutcliffe, who recently said the plant could make £30m a year, finance director Robert Green and non-exec Clare Spottiswoode have between them taken up 76,000 new shares.

New coal mining shell Libra Natural Resources more than doubled in value to 6½p on its Aim debut. Libra raised £1.26m via a 3p share placing.

Also launched on Aim today was Brooks Macdonald, a private wealth management group that raised £1.75m. Its shares advanced by 14½p to 154½p.