Market Report: Anniversary ignored as shares hit another peak

SIX YEARS AGO, the crash that would wipe an incredible 700 points from the FT-SE 100 index was about to hit shares. Yesterday they continued to ignore this devastating link with the past, surging to yet another peak, the blue chip index rising by 16.8 points to 3,137.6. Once again it was a combination of overseas buying, interest rate hopes and futures activity that provoked the excitement.

Rentokil, the environmental group that took over Securiguard in the summer after an acrimonious confrontation, provided much of the action, as its Danish masters reduced their stakes through SG Warburg.

Sophus Berendsen, a holding company, sold 29 million shares, cutting its holding to 52.4 per cent, and the KG Anker-Petersen Will Trust unloaded 11 million shares, taking its stake to 3 per cent. Sophus, which has pledged not to sell more shares for a year, is using the cash inflow to reduce 'short term liabilities'.

The shares were placed at 204p among institutional investors. Rentokil eased 2p to 209p.

The Rentokil placing represented a significant slice of blue chip trades. Once again much of the cash trading was among the second- and third-liners and the fringe shares.

Although powerful investors were prepared to pump cash into the market, it was the private investor, operating mainly through smaller stockbrokers, who generated much of the trading.

British Aerospace had a difficult session, as worries continued about its proposed Taiwan joint venture. The shares fell 16p to 406p.

Insurance shares were subdued with talk of cash being taken out of the sector to satisfy the demands of the new-style investment vehicles being set up to provide funds for Lloyd's of London. Commercial Union lost 4p and fell to 624p.

NatWest Securities moved from buy to hold on Guardian Royal Exchange, leaving the shares, in their ex-dividend form, down 4p at 218p. It also switched its stance on Sedgwick, the insurance broker, from sell to hold. The price added 2p to 181p.

Drugs were firm, with Wellcome up 10p to 766p, as one of the rivals to its Zovirax treatment for herpes ran into trouble.

Medeva's steady revival continued, with bullish talk that the worst is now behind the group. The shares rose 4p to 123p.

They are still a far cry from the 236p peak hit before US difficulties prompted a profit warning. In a day the price almost halved. The shares went to 85p before bottom fishing started the rally.

The group is headed by a former Glaxo Holdings executive, Bernard Taylor, who built Medeva from a tiny third-line company into one that many saw as a potential big player in the drugs market.

This month, Societe Generale Strauss Turnbull argued that the shares had been treated too harshly, and despite the profit warning the fundamental attractions remained.

Dalgety was put under pressure by talk of a profit downgrading in preparation. Including a 12.65p dividend, the shares lost 22p to 457p.

Marks & Spencer attracted positive comment from Hoare Govett, improving 1p to 405p. Its analyst Emma Burdett has lifted this year's forecast from pounds 825m to pounds 860m and next year's from pounds 885m to pounds 930m. The possibility of M&S opening its stores on Sunday has not been factored into the calculations. The upgrading stems from improving margins and sales.

Betterware's unhappy decline continued, with the shares down 12p at 183p.

Budgen's cash-raising exercise left the shares 1p higher at 44p, with some saying the move will leave the group more vulnerable to a German bid. Trafalgar House, making another rights issue, retreated 11.5p to 85p.

Automated Security jumped 23p to 142p. The shares have staged a remarkable recovery since Tom Buffett, the chairman, purchased 250,000 at 111p last week. They have climbed from the 97p they hit after Barclays de Zoete Wedd quit following a row over the group's enhanced scrip dividend and profit warning.

The revival was fuelled, apparently, by comments in Barrons, the US investment magazine.

Tottenham Hotspur's advance on the Sugar connection came to a sudden end on the appearance of a profit warning. The shares dropped 10p to 105p, then moved to 109p. Vardon, the leisure group, jumped 9p to 106p. Nicholas Irens, its founding director, has acquired 43,000 shares at 97p, lifting his holding to 202,000.

Howden, the engineer, was firm as Warburg put out a buy recommendation. There was busy trading, with Seaq putting volume at 3.2 million shares. Some wondered whether the long-rumoured takeover strike was in the offing.

Smith New Court rose a further 14p to 394p, following the increased BZW profit forecast. Other investment groups were firm, with talk of upgradings. Warburg improved 11p to 896p.

The Franks family has reduced its interest in Essex Furniture, which last week produced record profits. Michael and Martin Franks have each sold 235,000 shares at 155p. The buyer would appear to be Newton Investment Management, which has lifted its interest to 8.3 per cent. The Franks stay in control with a combined 52.68 per cent holding. The shares are 158p.

Division, a virtual reality group, could be a significant beneficiary of today's expected share debut of Virtuality. Placed at 170p, the shares, some believe, could open at 250p. Division, placed at 40p in May, rose 7p to 97p. It is smaller and on a lower rating than Virtuality and there are expectations that investors who find the newcomer too heady will turn their attention to Division.