Market Report: British Gas injects activity into lethargic market

Energy shares managed to inject a little activity into a lacklustre stock market, again weighed down by concerns over the Budget.

British Gas was the catalyst for the energy display. The shares jumped 19.5p to 228.5p, the highest since June, as the long-running rumour of a takeover bid from the Shell oil giant was dusted down and given sudden prominence.

The market has grown increasingly convinced that Shell, as well as British Petroleum, are casting around for major acquisitions. Besides British Gas, the two generators, National Power and PowerGen, have in recent weeks been put forward as likely victims of the ambitions of the oil giants.

BP gained 5p to 675p and Shell 10.5p to 996.5p. National Power rose 8.5p to 453.5p and PowerGen 8p to 573p. ScottishPower joined in, adding 7p to 329p.

Most oils were firm. Lasmo put on 5p to 213.5p as Panmure Gordon drew attention to the group's attractions and predicted the shares would top 300p by the end of next year.

Lasmo has the distinction of beating off a takeover assault from Enterprise Oil. It is still looked upon as a bid candidate, with a US strike thought likely to emerge.

Hopes the remaining electricity distributors will soon be engulfed in corporate action lifted London Electricity 10.5p to 636.5p and Yorkshire Electricity 11p to 746.5p.

British Energy, figures on Thursday, was squeezed 2.5p higher to a 126p peak.

Elsewhere activity was inhibited not only by the Budget but by growing uncertainty over interest rates and the problems the strength of sterling is creating for some companies.

Government stocks scored gains on the back of the PSBR figures.

Footsie could muster only a 3.9-points gain to 3,962.1 with second and third-line stocks mostly in retreat.

Cookson, the industrial materials group, fell 10p to 226.5p as the rumoured bid - Friday's hot tip - failed to materialise.

BT fell 6.5p to 364.5p, overshadowed by first-time dealings in Deutsche Telekom.

Profit warnings undermined sentiment. Forward, a maker of printed circuit boards, crashed 149.5p to 132p; Meltek, a computer support group, slumped 25p to 72.5p; and Colleagues, a recruitment group, suffered a 17p fall to 52.5p despite the promise of a maintained final dividend. Although the accompanying trading statement was subdued, it was a cross of 770,000 shares at 50p which created the hesitancy. Publisher Rushmere Wynne shaded 0.25p to 2p following a warning of a 10-month pounds 100,000 loss.

Vanguard Medica jumped 55p to 565p as the SmithKline Beecham giant confirmed plans to market its migraine drug. Toad, the vehicle securities group, advanced 7.5p to 87.5p; it has won two contracts which could push the fledgling group close to break-even.

WS Atkins, an engineering consultant, reached its highest since its July flotation. It has achieved the contract to be project manager of the first phase of an electronic components plant in South Wales. Sold at 215p, the shares gained 26p to 348.5p.

Jefferson Smurfit, the packaging and paper group, added 2.5p to 166.5p as Salomon Brothers said buy. The shares are down 27 per cent from their peak, hit two years ago, and Salomon says the company has an "impressive track record of buying undervalued and earnings-enhancing assets; it has never built a new paper machine".

House of Fraser continued to attract bid speculation, up 5.5p to 157p. Hambros, the merchant bank which has seen off vulture fund Regent Pacific, gained 12p to 247.5p as favourable comment from Barclays de Zoete Wedd mingled with thoughts that the group is still vulnerable to a strike.

Provend, the vending machine group, made a lively debut, briefly trailing its placing price but ending with a 7.5p gain at 132.5p.

Ockham's decision to float its stockbroking arm, Wise Speke, left the insurance group 2.5p down at 82.5p.

Bluebird, the toy maker, was enlivened by the $755m US toys merger between Mattel and Tyco Toys. The prospect of more toy deals in the run-up to Christmas was enough to lift Bluebird 13.5p to 180p. The shares, however, have had a dismal run, falling from 357p earlier this year.

Fibernet, rolling out a national network linking computers with faxes, telephones and videos, edged forward 2p to 124.5p after reporting a pounds 328,000 profit. Stockbroker Greig Middleton expects a loss of pounds 1.9m this year with a surge into profits of pounds 10.4m in the following year.

Taking Stock

rEmerald Energy stuck at 2.5p. It has, through an institutional placing by stockbroker WH Ireland, raised pounds 7.5m and stands to get a further pounds 4.3m from a placing and open offer.

The cash is needed to develop oil projects in Columbia. Dr Keith Hewitt, leading the Colombian charge, has enjoyed remarkable success in the areas Emerald is exploring. It is said the projects each have the potential of 1 billion barrels of oil.

rEyecare Products, a spectacles maker, has formed a company with Lantis, a US group, which involves the marketing of the high profile Donna Karan range.

Lantis is paying 37.5p for a 15 per cent stake in Eyecare and has an option to buy another 12.3 per cent at between 47.5p and 57.5p. Eyecare rose 3.5p to 33p.

Suggested Topics
Start your day with The Independent, sign up for daily news emails
Arts and Entertainment
Lou Reed distorted the truth about his upbringing, and since his death in 2013, biographers and memoirists have added to the myths
musicThe truth about Lou Reed's upbringing beyond the biographers' and memoirists' myths
Ed Miliband received a warm welcome in Chester
election 2015
Life and Style
Apple CEO Tim Cook announces the Apple Watch during an Apple special even
fashionIs the Apple Watch for you? Well, it depends if you want it for the fitness tech, or for the style
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

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

iJobs Job Widget
iJobs Money & Business

SThree: Trainee Recruitment Consultant

£20000 - £25000 per annum + OTE £45,000: SThree: SThree Group have been well e...

Ashdown Group: IT Manager / Development Manager - NW London - £58k + 15% bonus

£50000 - £667000 per annum + excellent benefits : Ashdown Group: IT Manager / ...

Recruitment Genius: Sales Consultant / Telemarketer - OTE £20,000

£13000 - £20000 per annum: Recruitment Genius: Scotland's leading life insuran...

Ashdown Group: Training Programme Manager - City, London

£40000 - £45000 per annum + benefits : Ashdown Group: Training Programme Manag...

Day In a Page

Armenian genocide: To continue to deny the truth of this mass human cruelty is close to a criminal lie

Armenian genocide and the 'good Turks'

To continue to deny the truth of this mass human cruelty is close to a criminal lie
Lou Reed: The truth about the singer's upbringing beyond the biographers' and memoirists' myths

'Lou needed care, but what he got was ECT'

The truth about the singer's upbringing beyond
Migrant boat disaster: This human tragedy has been brewing for four years and EU states can't say they were not warned

This human tragedy has been brewing for years

EU states can't say they were not warned
Women's sportswear: From tackling a marathon to a jog in the park, the right kit can help

Women's sportswear

From tackling a marathon to a jog in the park, the right kit can help
Hillary Clinton's outfits will be as important as her policies in her presidential bid

Clinton's clothes

Like it or not, her outfits will be as important as her policies
NHS struggling to monitor the safety and efficacy of its services outsourced to private providers

Who's monitoring the outsourced NHS services?

A report finds that private firms are not being properly assessed for their quality of care
Zac Goldsmith: 'I'll trigger a by-election over Heathrow'

Zac Goldsmith: 'I'll trigger a by-election over Heathrow'

The Tory MP said he did not want to stand again unless his party's manifesto ruled out a third runway. But he's doing so. Watch this space
How do Greek voters feel about Syriza's backtracking on its anti-austerity pledge?

How do Greeks feel about Syriza?

Five voters from different backgrounds tell us what they expect from Syriza's charismatic leader Alexis Tsipras
From Iraq to Libya and Syria: The wars that come back to haunt us

The wars that come back to haunt us

David Cameron should not escape blame for his role in conflicts that are still raging, argues Patrick Cockburn
Sam Baker and Lauren Laverne: Too busy to surf? Head to The Pool

Too busy to surf? Head to The Pool

A new website is trying to declutter the internet to help busy women. Holly Williams meets the founders
Heston Blumenthal to cook up a spice odyssey for British astronaut manning the International Space Station

UK's Major Tum to blast off on a spice odyssey

Nothing but the best for British astronaut as chef Heston Blumenthal cooks up his rations
John Harrison's 'longitude' clock sets new record - 300 years on

‘Longitude’ clock sets new record - 300 years on

Greenwich horologists celebrate as it keeps to within a second of real time over a 100-day test
Fears in the US of being outgunned in the vital propaganda wars by Russia, China - and even Isis - have prompted a rethink on overseas broadcasters

Let the propaganda wars begin - again

'Accurate, objective, comprehensive': that was Voice of America's creed, but now its masters want it to promote US policy, reports Rupert Cornwell
Why Japan's incredible long-distance runners will never win the London Marathon

Japan's incredible long-distance runners

Every year, Japanese long-distance runners post some of the world's fastest times – yet, come next weekend, not a single elite competitor from the country will be at the London Marathon
Why does Tom Drury remain the greatest writer you've never heard of?

Tom Drury: The quiet American

His debut was considered one of the finest novels of the past 50 years, and he is every bit the equal of his contemporaries, Jonathan Franzen, Dave Eggers and David Foster Wallace