Footsie passes 4,600 as institutions bank on financials

MARKET REPORT

The furious stampede into financials sent Footsie soaring past the 4,600 milestone. In what has been a remarkable four-day week for blue chips the index jumped more than 170 points.

New York injected a cautionary note into yesterday's proceedings. It opened with a flourish but then moved into negative territory, pulling Footsie from its 4,646 high to 4,630.9, up 50.5.

The latest headlong rush into money shares saw financials capturing 14 of the top 20 spots. GRE, the insurer, led the charge with a 19p gain to 308p; Royal Bank of Scotland, with HSBC bid rumours again going the rounds, was runner, up with a 33p advance to 635.5p.

Others in awe-inspiring form included Barclays, up 46p to 1,255p; HSBC 62.5p to 1,857.5p, with Dresdner Kleinwort Benson signalling a pounds 21 target, and Abbey National 28.5p to 913p.

Alliance & Leicester, however, ran out of enthusiasm. After hitting 655p the shares ended unchanged at 626p as some of the members who resisted the lure of the institutional auctions decided to cash in their chips.

The insatiable appetite institutions are displaying for financials is, in some quarters, creating unease. For years many were reluctant to get too deeply involved.

Now with the financial sector being enlarged by the rush of conversions they are, as the herd instinct takes over, falling over themselves to get stock and paying some exceedingly fancy prices.

Christie's International, the fine art auctioneer, firmed to 301.5p as Joseph Lewis, the mega rich Bahamas-based entrepreneur, lifted his stake to 29.57 per cent. Almost certainly the shares came from Watmoughs, the struggling printer which sold 3 million at 295p, netting a pounds 5m profit. It was not enough to induce interest in its shares, off 1.5p to 275p.

The company said last month interim profits would be lower, a warning which sent its shares crashing 87.5p.

The J Sainsbury/Marks & Spencer meat alliance story fell from its hook as Marks offered a complete rebuttal. A spokeswomen said: "Its absolute nonsense; there is no truth in it whatsoever."

Safeway, the supermarket chain with results next week, gave up 5p to 338p as SBC Warburg was said to have turned negative. Profits of around pounds 425m (pounds 401m) are likely.

BT, reflecting The Independent report of Government talks to allow a move into entertainment broadcasting, was at one time 4p higher at 454.5p. But criticism from Oftel over its Call Minder answering service left the shares at 451.5p, up 1p.

Engineer APV climbed above the Siebe bid to 106.5p as speculators banked on a rival offer. Applied Distribution advanced 6p to 42p with Tibbet & Britten emerging as the likely bidder with, its seems, 48p the likely price.

The bidder for Cullens, the convenience stores chain, is Administore, owners of Europa Foods. It is offering 28p a share; the price rose 3.5p to 27.5p.

BSkyB fell 9.5p to 586p as 20 million shares were placed by Goldman Sachs at 582p.

Allied Domecq was another in doleful form, falling 8p to 428.5p. Interim results are due on Tuesday and the market is fretting that figures, expected to be moderately lower, will be accompanied by talk of flat drink profits.

Pilkington edged forward 1p to 115p. There is some excitement developing in the warrants. They rose 3.25p to 15.5p; last month they hit an 1l.25p 12 month low. The warrants convert in a year's time at 120p.

Shield Diagnostic produced another confident statement about its AFT product for detecting heart problems. The shares, which have more than halved from their 805p February peak, rallied 50p to 447.5p.

Toad, up 9p to 50p, continued to enjoy life with Noel Edmonds, who has concluded an up to pounds 600,000 deal with the car security group.

Tring International, the struggling music group, held at 11p as former executives demanded the removal of four directors including chairman Joe Bolton. Mark Frey and Jay Chernow, with around 20 per cent of the capital, have demanded a shareholder meeting to vote on the proposed board changes. The shares have fallen from 39p a year ago and from 151p in 1994.

Allied Leisure, the 10 pin bowling chain, fell 4p to 31p. Worries about trading and changes such as the minimum wage have lowered the shares from 59.5p earlier this year.

Media Business held at 7.25p. Stockbroker Granville Davies believes the shares are attractive, suggesting profits of pounds 1.5m for the year just ended and pounds 1.73m this year.

Taking Stock

rEurocamp, offering camping holidays in France, is holding at its year's high of 246p with a mixture of takeover and trading hopes influencing the shares. Acquisitive Airtours, with a similar operation to Eurocamp, hovers on the bid horizon. Stockbroker John Siddall's keenness stems largely from trading considerations and analyst Audrey Carroll expects profits of pounds 11m this year against pounds 9.3m last time. The shares were 162.5p in November.

rFrost, the petrol retailer squeezed unmercifully by the industry giants, is on course to nearly double profits. Credit Lyonnais Laing analyst Ian Jermin expects profits to reach pounds 21m this year against pounds 10.4m last year. He is looking for pounds 24.3m in 1998. The shares are 124.5p against the 269.5p before the petrol price war erupted.