MAM misses out as financials lead blue-chip surge


Mercury Asset Management is missing the fun. As blue chips in general and financials in particular lead the stock market higher, the City's most powerful fund manager appears to be the wallflower at the party.

Footsie climbed to yet another peak but MAMs fell 16.5p to 1,272.5p. The shares have found the going uncomfortable since peaking at 1,463.5p in May. The market is uneasy over the group's investment performance. The most persistent story is it suffered a poor second quarter and, in certain areas, is, in effect, bottom of the class.

It appears its mixed equity and property fund had a particularly unimpressive time.

PDFM, the fund management arm of Swiss owned UBS, is another said to have underperformed in the second quarter. It has for long been banking on an equity collapse, putting a surprising large slice of its funds into cash.

There is no doubt that many fund managers have been caught on the hop by the strength of equities. The chorus of caution in the Merrill Lynch survey could be an illustration of their misjudgement.

MAMs, with around pounds 70bn under management, has been the deciding influence in many big takeover battles. It ensured Granada won the fierce pounds 3.9bn battle for control of the Forte catering and hotel empire.

Whether MAMs and its investment supremo, the remarkable Carol Galley, have misjudged equities remains to be seen. The share performance, even with the help of occasional takeover interest, is suggesting MAMs may have underperformed.

Footsie managed another unabashed, heady gallop. Once again overseas investors were out in force. In heavy trading - Seaq volume topped 1 billion shares - the blue-chip index soared 64.9 points to 4,964.2. At one time it seemed intent on surging through the 5,000 barrier. In mid afternoon it was up 92.5 at 4,991.8.

Then New York introduced a little caution into the proceedings. In the event it shrugged off early hesitancy and during London hours smashed through 8,000 points.

Compared with New York and European markets London looks cheap. Overseas investors are unworried by the increasingly inflated valuations which, anyway, are still below those in most other markets.

Even so, the feeling shares are rising too quickly, too steeply prevails in many quarters. There is a tendency to draw comparisons with the 1987 crash; the anniversary of the great equities blood bath is drawing uncomfortably near.

Although the FTSE 250 index jumped 36 points blue chips remained the attraction, underlining overseas buying.

Some foreigners feel quite adventurous trading in London; they are not, however, going to wander outside the comfort and protection of leading equities.

Financials again had a good run with HSBC powering ahead 65p (after 116p) to 2,151p. National Westminster Bank, on the rumoured shake-up at its securities arm, recovered 21p to 874p.

The market still feels a big financial bid is being hatched. HSBC has at one time or another been linked with almost every financial in sight. Abbey National, currently bidding for Cater Allen, is another seen as strongly acquisitive.

Drugs, a long-time favourite of US fund managers, enjoyed support. They continue to direct their attention towards the bigger players with Zeneca up 67p to 2,265p; only six months ago speculators were piling into the shares in the hope of a bid materialising at around 2,200p.

ScottishPower had an eventful session, closing 20p higher at 467p. Some chunky trades went through with some suggesting technical influences.

BT continued to feel the impact of the MCI fiasco, falling 7p to 445.5p. The latest twist in the drink merger cocktail lifted Grand Metropolitan 15.5p to 621.5p and Guinness 14.5p to 620.5p.

Among supporting shares British Biotech continued to rally, up 15.5p to 183p but Medeva fell 34.5p to 222p with worries about Ionamin, the recent subject of a "Dear Doctor" letter from the US Food and Drug Administration.

Iceland, the frozen food chain, rose 3p to 90.5p as Credit Lyonnais Laing hung a buy sign over the shares and Northern Foods jumped 11.5p to 224.5p on SBC Warburg support.

TI, the engineer, enjoyed a NatWest Securities recommendation, putting on 18.5p to 511p.

A trading warning left Plasmon, an electronic equipment group, wallowing 86.5p lower at 92.5p and a profits fall programmed Microgen, a computer concern, 31p down to 118.5p.

Start your day with The Independent, sign up for daily news emails
Barn owls are among species that could be affected
charity appeal
Sarah Silverman (middle) with sister Reform Rabbi Susan Silverman (right) and sister actress Laura Silverman (left) at Jerusalem's Western Wall for feminist Hanuka candle-lighting ceremony
peopleControversial comedian stages pro-equality Hanukkah lighting during a protest at Jerusalem's Wailing Wall
After another poor series in Sri Lanka, Alastair Cook claimed all players go through a lean period
cricketEoin Morgan reportedly to take over ODI captaincy
Life and Style
food + drink
Arts and Entertainment
a clockwork orange, stanley kubrick
filmSony could have made a cult classic
Life and Style
fashionThe essential guide to all the designer Christmas sale dates
ebooksA year of political gossip, levity and intrigue from the sharpest pen in Westminster
news... you won't believe how bad their skills were

Arts and Entertainment
Mark Wright and Mark Wright
tvStrictly goes head-to-head with Apprentice
footballPremier League preview: All the talking points ahead of this weekend's clashes
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Carlton Senior Appointments: Private Banking Manager - Intl Bank - Los Angeles

$200 - $350 per annum: Carlton Senior Appointments: Managing Producer – Office...

Carlton Senior Appointments: San Fran - Investment Advisor – Ind Advisory Firm

$125 - $225 per annum: Carlton Senior Appointments: San Fran - Investment Advi...

Sheridan Maine: Commercial Finance Manager

Up to £70,000 per annum + benefits: Sheridan Maine: Are you a qualified accoun...

Sheridan Maine: Regulatory Reporting Accountant

Up to £65,000 per annum + benefits: Sheridan Maine: Are you a qualified accoun...

Day In a Page

Homeless Veterans appeal: 'You look for someone who's an inspiration and try to be like them'

Homeless Veterans appeal

In 2010, Sgt Gary Jamieson stepped on an IED in Afghanistan and lost his legs and an arm. He reveals what, and who, helped him to make a remarkable recovery
Could cannabis oil reverse the effects of cancer?

Could cannabis oil reverse effects of cancer?

As a film following six patients receiving the controversial treatment is released, Kate Hilpern uncovers a very slippery issue
The Interview movie review: You can't see Seth Rogen and James Franco's Kim Jong Un assassination film, but you can read about it here

The Interview movie review

You can't see Seth Rogen and James Franco's Kim Jong Un assassination film, but you can read about it here
Serial mania has propelled podcasts into the cultural mainstream

How podcasts became mainstream

People have consumed gripping armchair investigation Serial with a relish typically reserved for box-set binges
Jesus Christ has become an unlikely pin-up for hipster marketing companies

Jesus Christ has become an unlikely pin-up

Kevin Lee Light, aka "Jesus", is the newest client of creative agency Mother while rival agency Anomaly has launched Sexy Jesus, depicting the Messiah in a series of Athena-style poses
Rosetta space mission voted most important scientific breakthrough of 2014

A memorable year for science – if not for mice

The most important scientific breakthroughs of 2014
Christmas cocktails to make you merry: From eggnog to Brown Betty and Rum Bumpo

Christmas cocktails to make you merry

Mulled wine is an essential seasonal treat. But now drinkers are rediscovering other traditional festive tipples. Angela Clutton raises a glass to Christmas cocktails
5 best activity trackers

Fitness technology: 5 best activity trackers

Up the ante in your regimen and change the habits of a lifetime with this wearable tech
Paul Scholes column: It's a little-known fact, but I have played one of the seven dwarves

Paul Scholes column

It's a little-known fact, but I have played one of the seven dwarves
Fifa's travelling circus once again steals limelight from real stars

Fifa's travelling circus once again steals limelight from real stars

Club World Cup kicked into the long grass by the continued farce surrounding Blatter, Garcia, Russia and Qatar
Frank Warren column: 2014 – boxing is back and winning new fans

Frank Warren: Boxing is back and winning new fans

2014 proves it's now one of sport's biggest hitters again
Jeb Bush vs Hillary Clinton: The power dynamics of the two first families

Jeb Bush vs Hillary Clinton

Karen Tumulty explores the power dynamics of the two first families
Stockholm is rivalling Silicon Valley with a hotbed of technology start-ups

Stockholm is rivalling Silicon Valley

The Swedish capital is home to two of the most popular video games in the world, as well as thousands of technology start-ups worth hundreds of millions of pounds – and it's all happened since 2009
Did Japanese workers really get their symbols mixed up and display Santa on a crucifix?

Crucified Santa: Urban myth refuses to die

The story goes that Japanese store workers created a life-size effigy of a smiling "Father Kurisumasu" attached to a facsimile of Our Lord's final instrument of torture
Jennifer Saunders and Kate Moss join David Walliams on set for TV adaptation of The Boy in the Dress

The Boy in the Dress: On set with the stars

Walliams' story about a boy who goes to school in a dress will be shown this Christmas