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IS THE MARKET REACTION TO THE C&W UPDATE JUSTIFIED?

<strong>MORTEN SINGLETON </strong>COLLINS STEWART<br />&ldquo;The market has reacted to the downgrade for the full year, but we think this is a great opportunity to buy into Cable &amp; Wireless. There will likely be some uplift after the news of the de-merger, albeit small as it was a well-flagged event, though there was scant detail on the plans.&rdquo;<br /><br /><strong>JONATHAN GROOCOCK </strong>INVESTEC<br />&ldquo;The first-half results are weak, with a particularly poor performance in Caribbean. The demerger is &lsquo;now underway&rsquo;, but in the absence of a trade buyer, we struggle to see the value created by such a move. Shares are likely to weaken on this.&rdquo;<br /><br /><strong>EITH BOWMAN </strong>HARGREAVES LANSDOWN<br />&ldquo;It was a bit of a mixed bag, with improved earnings in the first half but full-year guidance revised downwards. News of the de-merger didn&rsquo;t come as a big surprise and it is difficult to tell how far management have come along with their discussions, which added to the disappointment.&rdquo;