Schroders duo build-up BP; Only $50bn fine would cut dividend

Schroder Income duo Nick Kirrage and Kevin Murphy have increased their position in BP over the past 48 hours, believing it is "almost inconceivable" it will face a fine above the $50bn level which would put its dividend in jeopardy.

The pair, who replaced Nick Purves and Ian Lance last month, had previously made no changes to the £1.53bn fund since taking over, but they have been building up their BP position in recent days as investors retreated on fears over the fallout from the Gulf of Mexico disaster. Kirrage says: "Looking at the cashflows that is being thrown off by that business and the market implied discount from legislative punishment and environmental clear-up, it is quite clear to us there is something emotional going on with that share price rather than it being valuation-driven." BP accounts for 3.5...