MARKET REPORT : BSkyB comes down to earth

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The Independent Online
Shares of the BSkyB satellite television group suffered what could be embarrassing fatigue as the soap opera support operation mounted by US securities house Goldman Sachs entered its final episode.

The price slumped 10p to 245.5p, lowest since last month's flotation.

Trading was often hectic with Seaq putting turnover at around 19.1 million shares. There was a large number of delayed trades, each of more than 150,000 shares.

Goldman has mounted what is called a stabilisation exercise since the shares were sold at what many regarded as a rich price of 256p. Despite a turnover of more than 200 million shares, Goldman had managed, until Wednesday, to keep the shares above the sale price.

The dramatic fall-out yesterday caught the market in two minds. Had Goldman found the selling pressure too strong; or was the shrewd American house merely holding off, letting the price slip and therefore trying to deter sellers?

What is clear is that BSkyB is a highly technical market; one which should, at least in the near future, be avoided by the small investor. But in the heavily promoted share sale many private shareholders were drawn into the issue.

They are unlikely to be thrilled if, as commentators like Louise Barton of Henderson Crosthwaite suggest, the shares find their way to 200p.

The BSkyB decline occurred despite what many regarded as an encouraging trading statement covering the last three months of last year.

Pearson, the banking and publishing group which is a significant BSkyB shareholder, fell 10p to 543p.

The rest of the stock market had another dispiriting session with the FT-SE 100 index slipping 19.3 points to 3,032.3. A late futures sell-off did most of the damage.

The market decided to fret about today's US employment figures which, it is feared, could prompt the next American interest-rate increase.

The gloom was compounded by more selling of electricities on political worries. Properties and other interest-rate sensitive shares were unsettled by the fears of US moves.

Although the spark went out on the electricity pitch, talk of intriguing developments wafted around. Some were captivated by a sudden upsurge in the shares of Jardine Matheson, the sprawling Hong Kong giant which has a big, indirect influence in Trafalgar House, the conglomerate bidding for Northern Electric.

Jardine shares jumped 74p to 522p in an indifferent Hong Kong market. Northern fell 11p to 988p; Trafalgar 1p to 74p.

One theory was that Jardine was ruffled by signs Trafalgar could be losing the political battle and was planning a spectacular direct intervention.

Drugs were also down in the dumps. Stories persisted that Wellcome was having difficulties with the US Food and Drug Administration. With UBS putting out a sell recommendation the shares fell 19p to 667p. Glaxo was another under pressure, off 10p at 657p.

Fisons, by now the market's most bewhiskered takeover stock, gained 4p to 112p following the purchase of 800 June 120p call option contracts -equal to 800,000 shares.

MR Data Management, which has emerged as a hot takeover stock, held at 125p. Danka Business Systems, up 14p at 363p, is the favourite.

Retailers remained weak despite more encouraging trading statements. Boots fell 3p to 494p; Wm Morrison managed a 1p gain to 140p. Next failed to hold a 10p rise, ending slightly lower at 255p.

Abbey National managed a 2p gain to 432p, following a NatWest Securities profit upgrading. The investment house has lifted its forecasts from £943m to £964m and from £965m to £1,038m.

Harrisons & Crosfield, the chemical and timber group, edged ahead 6p to 142p in busy trading. Buyers, it appeared, were attracted by the 8 per cent dividend yield.

RTZ, the resource group, remained under pressure. James Capel was said to have produced a profit downgrading; Panmure Gordon, bears of the shares since they were 880p, say they are a sell down to 760p. They closed at 802p, down 16p.

Wembley, the struggling leisure group that owns the famous London stadium, stuck at 5.5p, despite reports, later denied, that a deal was being discussed to sell the stadium to the Premiership football clubs.

Chairman Sir Brian Wolfson said a number of schemes were being considered and an announcement would be made "before too long''.

Geest, the fresh food group, jumped 12p to 192p on vague talk of a takeover approach. Cadbury Schweppes lost its recent strength, down 3p to 428p.

United Biscuits felt the crunch, down 6p to 317p. Some fear that margins are under pressure and that the confectionery group may be prompted into making a cautious trading statement.

African Lakes Corporation, a rarely traded share, attracted attention, jumping 7p to 77p. The group has mining, engineering and vehicle distribution interests in Malawi as well as garage operations in this country. Although nearly £600,000 in the red in the first half of its year, hopes have been expressed of a strong second-half performance.

Talk of a significant acquisition lifted the shares of Oxford Molecular 7p to 76p. Since April's flotation the company has completed one deal, a £5.2m takeover of a US group, IntelliGenetics, which specialises in computer software used in DNA analysis and fitted in with Oxford's drug design software operations. Another US deal is thought likely.

MARKET REPORT The FT-SE 100 index fell 19.3 points to 3,032.3 and the supporting FT-SE 250 index lost 8.8 to 3,473.3. Turnover was 508.3 million shares with 17,481 bargains.

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