Market Report: BICC has a rare show of strength

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BICC, THE CABLES and construction group which has endured a humiliating time, enjoyed a rare burst of stock market stardom.

The shares bounded 8.5p to 48p as stories wafted around that the fallen giant was on the verge of a major corporate deal. The sale of its Balfour Beatty construction arm was the main inspiration behind the strength. Some, however, were prepared to bank on the whole BICC shooting match becoming engulfed in bid action.

BICC was a Footsie founder member. It was relegated from the blue chip index in 1986. Its performance has been disastrous, with a pounds 30m loss last year. Last week came a warning about second-half trading. It was enough to drive BICC shares down to 38p, putting them perilously close to the penny-share category. Back in 1989, they were comfortably above 500p.

Such a market casualty is clearly vulnerable to a strike and it would not be difficult to get rumours circulating of corporate action. Turnover was relatively heavy with Seaq putting volume at 6.75 million. There was talk that in recent days some large lines had been cleared but there was no indication just where the unwanted stock had ended up.

Footsie, perhaps a little beguiled by New York, ended 99.7 points higher at 5,331.2, highest for seven weeks. At one time the index was sporting a 140.6 gain with Wall Street's exuberance a telling factor.

Supporting shares continued to recapture lost ground. The mid cap index put on 51.9 to 4,715.7 and the small cap 16.4 to 1,970.

Allied Domecq had the unusual privilege of leading the blue-chip charge with its profits and confident statement producing a 49p gain to 520p. Elsewhere it was often the case of under-achievers attracting attention. There was also indications some fund managers felt obliged to scramble, if selectively, for stock. Lower interest-rate hopes remained a spur, with the Confederation of British Industry's call for a half-a-point cut in line with market thinking.

Reuters, the information group, was squeezed higher following last week's much better-than-expected trading statement, gaining 33p to 575p. British American Tobacco, off 28.5p to 478p, was hit by disappointing figures and Zeneca, down 127p at 2,210p, was the casualty of an uninspiring trading statement.

TI, the engineering group thought to have Vickers in its predatory sights, fell 20p to 345p and Rank, the leisure group, remained fearful ahead of tomorrow's third-quarter update, falling 10p to 223p.

British Aerospace rose 35p to 426p following its intriguing leasing deal and Norwich Union's pounds 315m take over of London & Edinburgh Insurance failed to win universal approval with the shares off 7p at 430p.

Retailers drew strength from the prospect of reduced interest rates and Debenhams results. Kingfisher rose 23p to 547p and Sears added 3.5p to 191.5p. Debenhams rose 25p to 367p.

Marks & Spencer, 16.5p higher at 463p, ignored BT Alex.Brown's caution. The investment house expects figures, due next week, to show a 16 per cent half-year profits fall to pounds 380m. Next, ruffled about the intentions of hedge fund Tiger Management, still a significant shareholder, fell 10p to 470p. Hard-pressed JJB Sports put on 20p to 203.5p.

Dixons, looking a candidate for a Footsie return, rose 35p to 628p. Hanson, the building materials group, will be another challenging for Footsie inclusion when the index is revised in December. The remnants of the old conglomerate rose 16.25p to 415p, a new peak.

Manchester Utd firmed to 220p as BSkyB claimed the support of shareholders with 45 per cent of the capital. The takeover has still to obtain regulatory approval.

John Foster, the old woollen group now largely a property operation, held at 12p as the IAF boarding party moved in. Stockbroker Keith Goldie- Morrison replaces Barry Spencer as chairman and David Massie, chairman of IAF, an asset finance group, is one of those joining the board. The shares held at 12p.

Leeds, the textile group with a remarkable 20 per cent-plus yield, came to life, jumping 11p to 50p in brisk trading.

Sherwood International, the computer group planning investment briefings, rose 20p to 1,015p.

Hoped-for Bangladesh exploration developments enticed Cairn Energy from its depression, lifting the shares 21p to 143.5p and vague suggestions of corporate activity gave a boost to IOC International, an electronic components group, up 14.5p to 52p.

Shire Pharmaceuticals rose 32p to 433.5p. It is resuming production of key product, Adderall.

Vanguard Medica remained depressed by the shelving of its warrants. The shares fell 12.5p to 200p and the dead-in-the-water warrants lost 0.5p to 3p.

SEAQ VOLUME: 847.7 million


GILT INDEX: 110.66 + 0.69

UPTON & Southern, the north eastern department stores chain, could soon flex its corporate muscles. It is keen to expand its head hunting and consultancy operations and acquisitions are under consideration. The retailing side is likely to play second fiddle in the planned build up. U&S, hit by tough conditions in the north east, lost pounds 85,000 last year compared with a pounds 423,000 profit. The shares are 2.75p.

AB AIRLINES, the little budget carrier which came to market at 95p in April, rallied 4.5p to 54.5p. There is vague talk of corporate action with stories flowing that some major investors have been approached for their stock. The group's slots at Gatwick Airport are thought to be worth as much as 200p a share. Accountant Tony Galbraith, for 15 years treasurer at British Airways, has joined AB's board.