BT to the fore in thin FTSE trading BT Group led the London market higher yesterday on hopes a trading update next week would ease worries about its growth and pension deficit. BT's group-wide restructuring announced in February can save £350m a year from its retail business over the long term, as well as spurring growth from fibre, television and fast 4G services, said Oriel Securities. It argued that per wholesale line, fibre earned BT at least 95 per cent more revenue than copper at little incremental cost. This "profitable growth" was "absent from consensus forecasts" that assume no growth in operating earnings until the year ending 2016, said the broker. Oriel also played down worries about BT's pension deficit, which analysts reckon has widened to around £6bn. Such calculations have proved a poor predictor for future top-up payments, as the actuarial valuation discounts liabilities on probable asset returns rather than on corporate bond rates, it said. Oriel set a 330p price target on BT, which rose 3.4 per cent to 285.7p. Thin trading in the wider market lifted the FTSE 100 by 0.3 per cent or 21.17 points at 6,451.29. Blue-chip volume was 60 per cent of the recent daily average. ENRC dropped 4.2 per cent to 262.8p on news that Suleiman Kerimov, the Russian billionaire, raised his stake in the scandal-hit miner to 2.96 per cent. The stakebuilding stoked concerns that Mr Kerimov might support a lowball bid by ENRC's founders and the Kazakhstan government, which together own 56 per cent of the stock. G4S was down 1.9 per cent to 307p after Merrill Lynch advised selling. Merrill highlighted a warning from US peer Securitas that US healthcare reform may push up the cost of employing guards by between 12 and 16 per cent, which would translate to a £40m hit to G4S's earnings. The renewal of a prisoner tagging contract in June or July also put at risk G4S's £20m of earnings, generated on £60m in sales, with the downside not reflected in consensus expectations, the broker said. Arm Holdings rose 3 per cent to £10.26 following a roadshow for US investors hosted by Canaccord. "Despite our very conservative assumptions for Arm's market share potential in both PCs and servers, we believe Arm will generate both sales and earnings growth above consensus estimates, justifying its valuation," said the broker, which kept "buy" advice. Dixons Retail gained 4 per cent to 36.5p ahead of a trading update due May 16. Deutsche Bank, which raised its target price to 41p, forecast Dixons to show 7 per cent same-store sales growth in the UK and Northern Europe. Platinum processor Johnson Matthey climbed 2.5 per cent to £24.85 after Credit Suisse raised its target price to £27. Melrose gained 2.4 per cent to 250p after the engineer sold Truth, its division selling locks and hinges. Tyman, formerly known as Lupus Capital, agreed to buy the business for £129m. "Melrose has owned the former FKI assets for nearly five years now, so it is positive to see the first meaningful disposal of these," said Barclays, which flagged up the group's Crosby, Brush and Bridon divisions as candidates to be sold. "We would expect management to assess the merits of a capital return with its next meaningful disposal," it said. Salamander Energy rose 1.3 per cent to 185p, with RBC highlighting a potentially transformational month for the explorer. Two high-impact exploration wells offshore Indonesia could add up to 232p a share to Salamander's valuation, RBC said. Man Group rose 3.7 per cent to 106p on news that its benchmark AHL fund had risen 2 per cent last week to its highest reading since October 2011. That put the fund just 3.3 per cent below its high water mark, where Man can start charging performance fees.