Market Report: Brake Brothers brings glimmer of festive cheer

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The Independent Online
IT WAS left to Brake Brothers, Britain's biggest supplier of frozen food to the catering industry, to offer a little stock market festive cheer on a lacklustre and cold Christmas Eve.

The shares, in a narrow market, jumped 32p to 440p, their highest since they were floated in 1986.

There were the usual mutterings of takeover action, although any deal would need the support of the Brake family, which controls the group. But there is no doubt Brake, which has an impressive profit record, would be an ideal swallow for an expansion- hungry group like Compass, the contract caterer.

The rest of the market produced the tepid display that throws into question the wisdom of a half-day session on Christmas Eve. A little mid-morning trading created modest interest but with Seaq putting the session turnover at 173.6 million the whole exercise seemed hard to justify.

The FT-SE 100 index, as if to underline the futility of it all, ended just 0.1 points higher at 2,827.5. The FT-SE 250 rose 6.3 to 2,848.9 and the FT-SE 350 gained 0.7 to 1,379.8.

British Aerospace, which has been a strong performer on the Henderson Crosthwaite recommendation last week, did attract some interest following an investment meeting on Wednesday evening. The shares, at one time down 12p, ended 5p adrift at 157p.

The presentation prompted County NatWest to increase its loss forecast for this year by pounds 25m to pounds 865m and lower its profit expectation for next year from pounds 105m to pounds 60m. It feels the shares will outperform over the longer term.

HSBC, the banking group, also created a flutter of excitement, improving 8p to 486p. A firm display by the Hong Kong share market and support from Nomura, the Japanese investment house, appeared to be responsible.

Glaxo Holdings continued to feel the impact of stockbroker caution, falling 8p to 748p.

Drink and store shares were mixed despite some reports of a late Christmas shopping spree.

A few garage shares drew further support from the December surge in car sales. Alexanders Holdings gained 3p to 17p and Appleyard Group 2p to 85p. But Kwik-Fit, the tyres and exhausts group, which jumped on Wednesday as takeover hopes re-surfaced, lost some of its exuberance, slipping 3p to 117p.

Malaya Group, being revamped by Nick Lancaster, the motor man, held at 20p. It is paying pounds 1.43m for a Kent Vauxhall dealership. Caverdale, backed by a number of young businessmen including Damian Aspinall (son of John) and James Packer (son of Kerry), is also buying a car distributor, paying pounds 885,000. The shares rose 0.5p to 4p.

Barclays, the banking group hit by its property loan exposure, ended unchanged at 380p. Smith New Court expects the bank to hold its dividend, despite losses that could reach pounds 180m.

It says: 'While we clearly recognise that the odds in favour of a dividend cut have narrowed we re-affirm our view that on balance it will be maintained.'

SNC is, therefore, more optimistic than Barclays' own investment house, Barclays de Zoete Wedd. It expects the dividend to be sliced from 21.15p to 14.15p. This week BZW widened its loss forecast from pounds 65m to pounds 110m.

Properties were firm, with Hammerson up again as takeover speculation refused to die. The powerful ordinary shares rose 5p to 298p and the low-voting 'A' shares rose 3p to 276p.

Pepe, the jeans group, shrank 5p to 4p as the market contemplated the rescue that includes the loss of the share quote. The shares started the year at 106p.

A quiet Christmas Eve session left the FT-SE 100 share index just 0.1 points higher at 2,827.5, while the FT-SE 250 rose by 6.3 points to 2,848.9. Trading, not surprisingly, was modest, with Seaq putting volume at 173.6 million shares with 10,647 bargains completed. Gilts were quiet, with most of the action taking place among inflation stocks