Market Report: Buyers pick Monsoon as it weathers retail storms

MONSOON APPEARED on several buyers' shopping lists yesterday amid rumours that the clothes chain is weathering the soggy retail market.

As the major indices soared to new all-time highs, the stock rose 2.5p to 61p before closing unchanged at 58.5p.

Monsoon's performance did not exactly take the market by storm, but a several knowledgeable dealers are keen on the company. The rumours coming from the high street suggest that Monsoon, and its earrings and necklaces spin-off Accesorize are doing better than most. Unlike many of its rivals, the company is not discounting any of its clothes - apart from the millennium party wear - and is netting some pretty juicy margins on its sales. On a like-for-like basis, turnover is said to be marginally higher than last year and above the sales of most of its peers.

This fairly bullish picture should be confirmed in the Christmas trading update in a few weeks and could be reflected in the finals due out in February. According to Seymour Pierce retail analyst Richard Ratner, Monsoon should raise pre-tax profits from last year's pounds 20.4m to pounds 23.5m and pay a dividend of 4.5p.

Shopoholic dealers believe that Monsoon's goodish performance is being shared by a few clothes chains such as Next, 38p better to 575p and Oasis, flat at 135.5p.

Sports retailers like JJB Sports, unchanged at 552.5p and JD Sport, flat at 147.5p, are also thought to be faring well.

However, the rest of the sector is having an horrific Christmas as penny- pinching customers force price cuts and squeeze margins. Middle-market retailers like Arcadia, up 2p at 81p, Debenhams, up 3p to 170p and Storehouse, up 4p to 45p, are said to be experiencing a sales bloodbath and their share price rises are mainly due to the ever-present bid whispers.

The computer games chain Electronics Boutique, down 0.25p to 36p, is also having a tough time and Mr Ratner has slashed its profit prediction from pounds 13m to pounds 9m, compared with pounds 15m in 1998.

The rest of the market got into the Christmas spirit with a record-breaking rally. The FTSE 100 exploited the thin trading conditions and an astonishing opening rise in the Dow to close 48.2 up to 6776.8 in its last full day before Christmas. In the process, the leading index smashed its intra- day peak, jumping 74.5 to 6803.1.

Unlike the blue-chip index, the undercard has been setting new records for a while and yesterday was just another day in its triumphal run. The FTSE 250 ended 15.8 higher to 6378.7, while the SmallCap moved 10.4 up to 3052.3.

With volume a skeletal 590 million shares, a few big movements made the difference.

Among blue chips, the heavyweight financials, telecom and pharmaceutical sectors were all in good form. Insurer Prudential soared 59p to a best- ever 1,165p on a hat-trick of rumours. First up was the talk that the Pru might receive an approach from a US or European giant. Secondly, there were renewed whispers of a new year float of the insurer's web bank Egg. And finally, a few investors were raving about the Pru's recent entry into the Chinese market. Bid talk lifted Bank of Scotland 20p higher to 709.5p. If its bid for NatWest, up 5p to 1299p, fails a takeover of BoS is seen as a real possibility.

Telecoms continued to be the bee's knees. Sector giant Vodafone AirTouch rang up a 9p rise to 305.75p after officially launching its mega bid for Mannesmann amid growing rumours that it will win the day. Colt, up 91p to a record 3,109p and Energis, 9p higher to 2,988p, were excited by the usual bid rumours.

Drugs were also administered a dose of takeover talk, with Glaxo Wellcome, 29p better at 1,669p and SmithKline Beecham, 11.5p higher to 771p, boosted by renewed whispers that merger negotiations are back on. Smaller rivals Shire Pharmaceuticals, up 30.5p to 646p and CeNeS, 6.5p higher to 53p, were boosted by talk of imminent licensing deals. The mail order group GUS joined the fun, rising 20p to 362p on continued whispers that a US takeover is nigh. Hilton Group rebounded 6.75p to 201p, also on speculation of a US tie-up.

Tech stocks had a mixed day despite another vertical rise by Nasdaq. Software group Misys, 61.5p better to a best-ever 945.5p on whispers of new deals, TV decoder maker Pace Micro, up 30p to 520p and mini-computer manufacturer Psion, 101p higher to 2,499p, followed their US peers.

However, high-fliers ARM Holdings, down 200p to 3,739p despite being included in NatWest's stock picks for 2000, Sage, down 44p to 725.5p, and midcapper, down a hefty 120p to 1,547.5p, were hammered by profit-takers.

In the midcap, aerospace group Smiths Industries flew 55p higher to 931p on whispers of new US deals, while renewed bid talk pushed United Assurance 13p higher to 318p.

Security group Securicor, an old bid chestnut, firmed 1p to 166.25p despite some large selling by an institutional shareholder. Growing takeover gossip helped water group Severn Trent to flow 26.5p higher to 609p, but fading hopes of a bid in the near-term wounded supermarket group Somerfield, 6.25p lower to 88.25p and chemical group Laporte, 30p down to 540p.

As usual, there was no stopping some of the tiddlers. Publisher MediaKey jumped 11p to a yearly peak of 30p as the ubiquitous Luke Johnson jumped on board and former Monty Python John Cleese left the company.

Internet investor Jelly Works, floated at 5p on Tuesday, rocketed 26.5p to 91p - an 18-fold rise in two days. Rivals, up 87.5p to 430p and Internet Indirect, up 15p to 59.5p, followed the trend.

Investment vehicle Culver jumped 35p to 582.5p after announcing pounds 5.2m fund raising at 120p-per-share for its travel website It also announced that it has regulatory clearance to demerge the business, probably in the first quarter of next year.

Willisham, the old Sentry Farming, ploughed 21p higher to 72.5p after revealing a number of reverse takeover approaches, while healthcare group Medical Solutions firmed 3.75p to 30.5p ahead of an expected acquisition.




SOME DEALERS are logging on to Screen amid whispers of a hi-tech contract. The AIM-listed software group is rumoured to be close to a tie- up to provide a large communications group with WAP technology - the much sought-after kit that allows mobile phones and other devices to receive data and images. The shares lost 0.5p to 13.75p yesterday after chairman Owen Williams sold 2.3m at 13p, netting around pounds 300,000 to improve liquidity.

ADAM FAITH'S Money Channel yesterday started practising what it will be preaching by netting a 94p profit to a record 359p. The rise was fuelled by a recommendation from a widely-followed tipsheet and rumours of contract wins. The channel has an agreement to beam its programmes on Sky and punters believe that similar deals, possibly with rivals OnDigital and NTL, could arrive before the transmission starts on 7 February.

Start your day with The Independent, sign up for daily news emails
ebookA unique anthology of reporting and analysis of a crucial period of history
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

Guru Careers: Software Developer / C# Developer

£40-50K: Guru Careers: We are seeking an experienced Software / C# Developer w...

Neil Pavier: Management Accountant

£45,000 - £55,000: Neil Pavier: Are you looking for your next opportunity for ...

Sheridan Maine: Commercial Accountant

£45,000 - £55,000: Sheridan Maine: Are you a newly qualified ACA/ACCA/ACMA qua...

Laura Norton: Project Accountant

£50,000 - £60,000: Laura Norton: Are you looking for an opportunity within a w...

Day In a Page

Sun, sex and an anthropological study: One British academic's summer of hell in Magaluf

Sun, sex and an anthropological study

One academic’s summer of hell in Magaluf
From Shakespeare to Rising Damp... to Vicious

Frances de la Tour's 50-year triumph

'Rising Damp' brought De la Tour such recognition that she could be forgiven if she'd never been able to move on. But at 70, she continues to flourish - and to beguile
'That Whitsun, I was late getting away...'

Ian McMillan on the Whitsun Weddings

This weekend is Whitsun, and while the festival may no longer resonate, Larkin's best-loved poem, lives on - along with the train journey at the heart of it
Kathryn Williams explores the works and influences of Sylvia Plath in a new light

Songs from the bell jar

Kathryn Williams explores the works and influences of Sylvia Plath
How one man's day in high heels showed him that Cannes must change its 'no flats' policy

One man's day in high heels

...showed him that Cannes must change its 'flats' policy
Is a quiet crusade to reform executive pay bearing fruit?

Is a quiet crusade to reform executive pay bearing fruit?

Dominic Rossi of Fidelity says his pressure on business to control rewards is working. But why aren’t other fund managers helping?
The King David Hotel gives precious work to Palestinians - unless peace talks are on

King David Hotel: Palestinians not included

The King David is special to Jerusalem. Nick Kochan checked in and discovered it has some special arrangements, too
More people moving from Australia to New Zealand than in the other direction for first time in 24 years

End of the Aussie brain drain

More people moving from Australia to New Zealand than in the other direction for first time in 24 years
Meditation is touted as a cure for mental instability but can it actually be bad for you?

Can meditation be bad for you?

Researching a mass murder, Dr Miguel Farias discovered that, far from bringing inner peace, meditation can leave devotees in pieces
Eurovision 2015: Australians will be cheering on their first-ever entrant this Saturday

Australia's first-ever Eurovision entrant

Australia, a nation of kitsch-worshippers, has always loved the Eurovision Song Contest. Maggie Alderson says it'll fit in fine
Letterman's final Late Show: Laughter, but no tears, as David takes his bow after 33 years

Laughter, but no tears, as Letterman takes his bow after 33 years

Veteran talkshow host steps down to plaudits from four presidents
Ivor Novello Awards 2015: Hozier wins with anti-Catholic song 'Take Me To Church' as John Whittingdale leads praise for Black Sabbath

Hozier's 'blasphemous' song takes Novello award

Singer joins Ed Sheeran and Clean Bandit in celebration of the best in British and Irish music
Tequila gold rush: The spirit has gone from a cheap shot to a multi-billion pound product

Join the tequila gold rush

The spirit has gone from a cheap shot to a multi-billion pound product
12 best statement wallpapers

12 best statement wallpapers

Make an impact and transform a room with a conversation-starting pattern
Paul Scholes column: Does David De Gea really want to leave Manchester United to fight it out for the No 1 spot at Real Madrid?

Paul Scholes column

Does David De Gea really want to leave Manchester United to fight it out for the No 1 spot at Real Madrid?