American investors feast enthusiastically on BTR

MARKET REPORT

BTR, once regarded as the country's outstanding conglomerate, led blue chips higher as American investors piled into the shares.

The price rose 10p to 199.5p (after 201.5p) in busy trading, accompanied by talk the group was on the recovery tack, although, inevitably, some wondered whether the long- mooted break-up bid was being prepared. The shares also scored from the reviving interest in manufacturing following sterling's slightly less exuberant form recently.

As the wheels have come off the conglomerate bandwagon BTR has been shunted into the stock market sidings. The shares, 407p three years ago, were down to 182.5p early this month. Once seen as the nation's best-managed big business, BTR has had a gruesome time. It is being "refocused" into four main divisions under chief executive Iain Strachan.

In May came a gloomy trading statement, prompting analysts to lower profit estimates. To add to its agony institutions have grown increasingly anxious and pressure has, so far without success, been applied for boardroom changes.

BTR shares have seen a number of false dawns. Whether the latest US enthusiasm will have any lasting impact remains to be seen. Certainly there is little domestic appetite for the shares.

The struggling conglomerate did at least have the rare satisfaction of joining another Footsie party. The index jumped 43.9 points to 5,075.8, only 11 from its peak. And second- and third-liners were again in form with the FTSE 250 index stretching to a peak and the FTSE SmallCap index once more relishing unfamiliar progress.

Firm Government stocks, an easing of interest rate worries, despite the inflation numbers, and a shortage of available shares combined to fuel the advance.

BTR was not the only blue chip enjoying overseas support. Once again foreign interest was the major influence with, it would seem, domestic fund managers still awaiting the dramatic slump they have been forecasting for so long.

BG, the old British Gas, enjoyed old-fashioned prospecting excitement, flaring 9.5p to 260.5p on off-shore Trinidad gas discoveries and hopes of a major Indonesian find. Its other half, Centrica, rose 0.5p to 93.25p with talk still heard it should hit 120p.

Allied Domecq, the drinks group, came in for one of its periodic heady runs, gaining 17p to 474.5p as recovery hopes blended with takeover gossip. De La Rue, the security printer, failed to continue its recent modest recovery, falling 12p to 418.5p as BZW offered sell advice.

J Sainsbury shrugged off an HSBC sell comment, gaining 16.5p to 455p. The stockbroker suggested a switch into Asda, up 4p to 150.25p, or Safeway, 12p better at 396.5p.

NatWest Securities melted Cadbury Schweppes 5p to 616.5p after saying the shares were a sell "given the unequal struggle it faces in the US".

Morgan Stanley left many drug shares one degree under when its US analyst, Paul Brooke, lost some of his enthusiasm for the sector. Glaxo Wellcome slipped 13p to 1,275p and Zeneca 17.5p to 1,946.5p. However, SmithKline Beecham added 10p to 1,151.5p and British Biotech 11p to 167p.

The French takeover interest in Leigh Interests caused excitement among other waste disposal companies. Caird jumped 62.5p to 745p and Waste Recycling moved ahead 4p to 272.5p.

James Halstead, the flooring to trailer tents group, produced the obligatory profit warning, falling 37.5p (after 55p) to 205p.

Emerald Energy, which has been providing weekly drilling bulletins, was another to suffer grief, losing a further 0.5p to 4p. The latest episode in its Colombian adventure leaves the chance of a strike at its Chawina prospect still tantalisingly elusive. Drilling has been suspended at a 2.5-mile depth because a more powerful rig is necessary. It is unlikely to be on site before February as it will be used to drill another Emerald well in October.

Premier Health, a nursing agency, looked in need of a little care and attention. The shares fell 1.5p to 7.5p, half the level at which they returned from suspension on Friday. Dealings were halted pending publication of accounts. They appeared last week, showing a pounds 1.1m loss. Premier, which used to be called Acsis, is anxious to sell its US operations and a $3.5m deal has been lined up. However it requires shareholders' approval.

There had been hopes the US disposal would take much of the strain off the group which enjoyed a 120p share price three years ago.

Taking Stock

r Engineer EIS, which has clawed its way from a 237.5p low to 262.5p, should be priced at around 350p, believes stockbroker Albert E Sharp. But analyst David Larkam is not expecting any short-term fireworks. The target may take two years to hit. He sees profits this year little changed at pounds 23.5m with pounds 26.3m next year.

r Abacus Polar, an electronic components distributor, put on 16p to 195p. There is a feeling the shares are oversold. In a tough market it is thought to be faring relatively well and profits this year could emerge at pounds 10.5m against pounds 8.9m.

r A reverse takeover of IG Index, the City bookie, is the latest buzz to get Surrey, the struggling leisure group, moving. The shares rose 0.25p to 1p.

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