MARKET REPORT : Bank of Scotland unmoved by hopes of tri-centenary payout

The FT-SE 100 index gained 5.6 points to 3,214.9 and the FT-SE 250 index 13.7 to 3,511.5. Turnover was 771.4 million shares with 25,888 bargains. Government stocks retreated.

Shares of Bank of Scotland dipped 2p to 219p ahead of what should be a momentous profit announcement. The proud Scottish bank, where Standard Life Assurance has a 32.7 per cent interest, will today produce a dramatic profits advance - from £269m to about £450m.

Such a performance should be a fitting tribute to the group's 300th anniversary. And it should, it could be argued, justify a handsome commemorative dividend.

But, judging by the shares' recent performance, the stock market is not too convinced the bank's canny approach will extend to a special payment to shareholders.

Early this year the shares were riding at 246.5p. Their weakness has occurred despite awareness of the group's fattening profits. NatWest Securities has confined its dividend forecast to a modest 14 per cent increase to 5.8p a share.

Most companies are stirred into recognising a centenary with a special dividend. So a tri-centenary is unlikely to be allowed to pass without acknowledgement. The BoS profits upsurge reflects a sharp trading improvement and a big fall in bad debt provisions.

The rest of the stock market produced another uneven performance. Early gains were pulled back significantly as interest rate worries seemed to assume increasing realism.

There is little faith that the much-hyped deliberations at the G7 meeting will produce any lasting influence on currency markets. The dollar could, it is felt, come under intense pressure once it is confirmed the Washington get-together has offered little, if anything, to correct the recent currency turmoil.

At one time up 24.8 points, the FT-SE 100 index ended 5.6 higher at 3,214.9.

VSEL, the shipbuilder, steamed to yet another high, up 17p to 1,655p on the conviction British Aerospace will be given the all-clear to reproduce its takeover bid. BAe's rights issue received a 93.4 per cent take-up and the rights units were quoted at 704p. The shares gained 6p to 520p. GEC, likely to be frozen out of the VSEL bidding, was firm at 299p.

The long-running market theory is that if BAe is allowed to capture VSEL it could provoke GEC into a double strike - BAe, plus VSEL. But such a manoeuvre would clearly annoy the Whitehall mandarins and would be unlikely to succeed.

Oils lost some of their recent exuberance with British Petroleum, in heavy trading, relapsing to 452p after almost touching 460p. Shell, however, took up the running, gaining 4.5p to 734p. Clyde Petroleum and Hardy Oil & Gas were firm. Enterprise Oil added 5p to 414p.

Cray Electronics fell another 6p to 73p on its profit warning but computer group Wakebourne recovered 4p to 49p after its cautious statement.

Abbey National, at one time up 12p, ended 5p lower at 475p following its descent on an unsuspecting National & Provincial Building Society. The TSB banking group firmed 4.5p to 248p with ABN Amro Hoare Govett positive.

Aberdeen Trust has become the latest takeover favourite in the financial sector. The shares rose a further 2.5p to 102p. They have risen 10p in the past week, inspired by the attention of Jupiter Tyndall, being taken over by the German Commerzbank. With Jupiter topping up its stake in Aberdeen, speculation of a German strike has gone the rounds.

An analysts' meeting lifted Taunton Cider 3p to 147p; Reed International put on 8p to 802p following a positive analysts' get-together.

Lloyds Chemists continued to move ahead with the unlikely rumour of a Kingfisher bid still to the fore. Lloyds gained 8.5p to 227p; Kingfisher added 2p to 446p.

Gehe, the German group that looks set to take over the AAH chemist shops chain, is likely to provoke defensive mergers among the leading chemists. UniChem, the former chemists' co-operative, is seen as a possible bidder for Lloyds,. UniChem fell 2p to 261p.

Imperial Chemical Industries, shaded to 748p. First-quarter results are due tomorrow. Barclays de Zoete Wedd is looking for £180m against £103m. It believes the year's outcome could be £810m, almost double last year's figure.

There was takeover speculation on the car dealers' pitch with Henlys ahead 16p at 325p on talk of an revived offer from Cowie Group, down 2p at 259p.

Fisons added 6p to 184p in busy trading. Rumours reappeared that Zeneca planned to barge into any agreed deal between Fisons and Medeva, down 3.5p at 251p. Zeneca gained 5p to 919p.

Tottenham Hotspur found the possibility of losing Jurgen Klinsmann almost too much to bear, falling 8p to 124p.

Insurance broker CE Heath, up 10p to 245p, reflected Credit Lyonnais Laing interest; Willis Corroon remained firm on hopes of a US deal, up 3p to 160p.

An upbeat yearly meeting lifted BAT Industries 6.5p to 466.5p.

Polypipe was busily traded, up 3p at 157p. Fund managers have visited its French operation and there is talk of profit upgrades. Logica, the computer group, rose 18p to 349p with Hoare Govett said to be bullish.

Scott Pickford, a firm of oil consultants, gained 7p to 38p. The group recently issued a profits warning, prompting stockbroker Beeson Gregory to cut last year's forecast from £800,000 to £550,000. This year's estimate is now £750,000.

Memory Corporation, which has developed a system for revitalising defective memory chips, has been busily traded this week. Shares jumped to 185p following an encouraging meeting in Edinburgh. The company arrived on the 4.2 share market at 45p towards the end of last year. Richard Lucas of stockbroker Henry Cooke, Lumsden expects profits of £3.7m followed by £20m.

Prime People, a recruitment business which has experienced a number of revamps, is being reshaped again. In a reconstruction it is raising £1.08m through a rights issue and taking over Portfolio International, which specialises in recruitment for the catering and hotel industries. It arrived on the market in 1988 at 60p a share. They were suspended at 1.5p on Friday.

Start your day with The Independent, sign up for daily news emails
News
The two faces revealed by the ultraviolet light
newsScholars left shaken after shining ultraviolet light on 500-year-old Welsh manuscript
News
Rosamund Pike played Bond girld Miranda Frost, who died in Die Another Day (PA)
news
Arts and Entertainment
books
News
newsHow do you get your party leader to embrace a message and then stick to it? With people like this
ebooks
ebooksA special investigation by Andy McSmith
  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

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

iJobs Job Widget
iJobs Money & Business

Ashdown Group: Marketing Manager - B2B, Corporate - City, London

£45000 - £50000 per annum + benefits : Ashdown Group: A highly successful, glo...

Neil Pavier: Commercial Analyst

£50,000 - £55,000: Neil Pavier: Are you a professionally qualified commercial ...

Loren Hughes: Financial Accountant

£45,000 - £55,000: Loren Hughes: Are you looking for a new opportunity that wi...

Sheridan Maine: Finance Analyst

Circa £45,000-£50,000 + benefits: Sheridan Maine: Are you a newly qualified ac...

Day In a Page

General Election 2015: The masterminds behind the scenes

The masterminds behind the election

How do you get your party leader to embrace a message and then stick to it? By employing these people
Machine Gun America: The amusement park where teenagers go to shoot a huge range of automatic weapons

Machine Gun America

The amusement park where teenagers go to shoot a huge range of automatic weapons
The ethics of pet food: Why are we are so selective in how we show animals our love?

The ethics of pet food

Why are we are so selective in how we show animals our love?
How Tansy Davies turned 9/11 into her opera 'Between Worlds'

How a composer turned 9/11 into her opera 'Between Worlds'

Tansy Davies makes her operatic debut with a work about the attack on the Twin Towers. Despite the topic, she says it is a life-affirming piece
11 best bedside tables

11 best bedside tables

It could be the first thing you see in the morning, so make it work for you. We find night stands, tables and cabinets to wake up to
Italy vs England player ratings: Did Andros Townsend's goal see him beat Harry Kane and Wayne Rooney to top marks?

Italy vs England player ratings

Did Townsend's goal see him beat Kane and Rooney to top marks?
Danny Higginbotham: An underdog's tale of making the most of it

An underdog's tale of making the most of it

Danny Higginbotham on being let go by Manchester United, annoying Gordon Strachan, utilising his talents to the full at Stoke and plunging into the world of analysis
Audley Harrison's abusers forget the debt he's due, but Errol Christie will always remember what he owes the police

Steve Bunce: Inside Boxing

Audley Harrison's abusers forget the debt he's due, but Errol Christie will always remember what he owes the police
No postcode? No vote

Floating voters

How living on a houseboat meant I didn't officially 'exist'
Louis Theroux's affable Englishman routine begins to wear thin

By Reason of Insanity

Louis Theroux's affable Englishman routine begins to wear thin
Power dressing is back – but no shoulderpads!

Power dressing is back

But banish all thoughts of Eighties shoulderpads
Spanish stone-age cave paintings 'under threat' after being re-opened to the public

Spanish stone-age cave paintings in Altamira 'under threat'

Caves were re-opened to the public
'I was the bookies’ favourite to be first to leave the Cabinet'

Vince Cable interview

'I was the bookies’ favourite to be first to leave the Cabinet'
Election 2015: How many of the Government's coalition agreement promises have been kept?

Promises, promises

But how many coalition agreement pledges have been kept?
The Gaza fisherman who built his own reef - and was shot dead there by an Israeli gunboat

The death of a Gaza fisherman

He built his own reef, and was fatally shot there by an Israeli gunboat