Market Report: Cable and Wireless gets a boost from East and West
Friday 15 October 1993
One was the continuing strength of the Hong Kong share market, which has hit new peaks with almost monotonous regularity. Judging from yesterday's late performance of colony shares traded in London it should continue to advance, with the Hang Seng index signalled to gain a further 200 points overnight.
C&W, of course, controls the quoted Hongkong Telecom. Its progress in the Hong Kong share- buying spree has dramatically strengthened the British group's balance sheet.
But C&W has also indulged in a share marketing exercise that has been well received. In June it announced it intended to split its shares, thereby improving marketability. At that time the shares were about 770p. The split occurs at the end of this month. Perhaps another share bonus will soon have to be considered.
The group's involvement with the Canadian BCE telecommunications giant was also good for the shares following the Bell Atlantic- Tele-Communications deal. In November BCE paid pounds 480m for a 20 per cent interest in C&W's Mercury communications group.
The increased cellular competition in this country, highlighted by Cable's launch of the one-2-one system, is now seen as positive, with earlier worries of squeezed margins pushed into the background.
Consequently, the US excitement pushed BT, still basking in the reflection of a successful Cellnet mobile telephone presentation, up 6.5p to 447p, and Vodafone put on 10.5p to 551p.
The Securicor trio, minority shareholders in Cellnet, were also in demand.
The rest of the stock market spent much of the session looking decidedly neglected, with investors unsettled by indications that the economic recovery could be faltering. But the hope that the Government would move to cut interest rates to keep the revival on course, together with unexpected strength in New York, combined to produce a 5.4-point gain to 3,086.3 at the close.
The Hong Kong excitement was also good for HSBC, the Hongkong & Shanghai Banking Corporation embracing Midland Bank. HSBC jumped 21p to 746p. Standard Chartered, also responding to Hong Kong influences, gained 9p to 1,014p.
BAT Industries improved 10p to 468p. The progress stemmed from a more relaxed attitude to pressure from price cuts on brands. The US group Procter & Gamble, which has indulged in price-cutting, is expected to produce a record first-quarter result.
And a leading US investment house is said to have turned bullish on Philip Morris, which had undermined BAT shares by cutting prices of its leading cigarette brands in the highly competitive US tobacco market.
Indications from the US suggest that tobacco sales recovered in September, with BAT's Brown & Williamson making up some lost ground. The reappearance of brand values was a contributory factor in an 18p gain to 1,094p by Unilever.
Racal Electronics fell 8p to 207p as some read its reorganisation as a profit warning. Thorn EMI dropped 14p to 906p. On top of the controversy over its Rent-a- Center operation and the US probe into compact disc prices came a 2.6 million share placing by Warburg.
Thorn said the seller was not one of its leading shareholders. The stock was placed with institutions at 890p. Warburg was reputed to have paid 883p.
Tarmac's 23.3 million rights rump was placed by Cazenove and Warburg at 138p. The rights attracted an 87.3 per cent take-up.
The emergence of a milk price war, with Tesco cutting prices, left Northern Foods down 10p at 247p and Unigate off 11p at 379p.
But the price shot did nothing for supermarket shares with Asda, Argyll, J Sainsbury and Tesco giving further ground. Asda was down 2.25p to 53.25p. Its continuing decline puts in doubt its ability to retain its recently reclaimed FT-SE 100 index membership.
The newcomer Parkdean, which runs holiday centres, traded at 128p against a 120p sale level. Flextech gained 8p to 162p on the Jim Slater recommendation in the Independent.
Pittencrieff jumped 21p to 366p. The US telecommunications excitement lifted the shares of its US mobile telephone offshoot and estimates are flying around that the cash-rich group, which still has oil interests, could have an asset value nudging 500p.
Princedale, the marketing services group, held at 30p. Kleinwort Benson likes the shares following the takeover of the industrial operation of Hillsdown Holdings. It expects profits to jump to pounds 725,000 this year, with pounds 1.7m likely in the following year.
The FT-SE 100 index recovered from early falls to close 5.4 points higher at 3,086.3, but the FT-SE 250 index lost 3.9 to 3,464.4. Turnover was 618.2 million with 28,008 bargains. The account ends today with settlement on 25 October. Gilts gave ground.
The convenience retailer M&W hit a new peak, up 3p to 143p, as most other food retailers remained under pressure. The shares were 75p earlier this year. There is talk of a bid. The rumoured predator is Watson & Philip, the ambitious stores group, embracing the Circle K chain. W&P has reduced its wholesaling operation to increase its retailing strength. Its shares held at 301p.
Flagstone Investments has made a quiet return; the shares rose 0.25p to 1.75p yesterday. The shell company last month acquired the Needles leisure operation in the Isle of Wight. More deals are expected soon. Next moves could involve the company, closely related to the Jersey entrepreneur David Kirch, buying Land's End and John o'Groats from Kirch interests.
Sales of the tablet are set to fall again, say analysts
Follow the latest updates from the Monday night Premier League fixture
Met Police confirm there was a 'minor disturbance' and that no-one was arrested
George Lucas criticises the major Hollywood film studios
Does Chris Grayling realise what a vague concept he is dealing with?
Trend which requires crisps, a fork and a strong stomach is sweeping Mexico's streets
Concerns raised phenomenon is threatening resort's image as a family destination
I Am Bread could actually be a challenging and nuanced title
Peter Biaksangzuala died from his injuries in hospital on Sunday
- 1 Indian footballer Peter Biaksangzuala dies after injuring spine doing somersault celebration
- 2 Jack the Ripper: Scientist who claims to have identified notorious killer has 'made serious DNA error'
- 3 Drink alcohol and eat meat to improve male fertility - but cut down on coffee, studies suggest
- 4 Kentucky gang rape: 15-year-old boy left in critical condition after sexual attack by group at party
- 5 Lynda Bellingham dead: Loose Women presenter dies after battle with colon cancer
Sophia Loren: How I rejected Cary Grant and 'pulverised' Marlon Brando with my eyes
Banksy arrest hoax: Internet duped by fake report claiming that the street artist's identity has been revealed
'Russian submarine spotted' by Swedish military off coast of Stockholm
Kentucky gang rape: 15-year-old boy left in critical condition after sexual attack by group at party
Oscar Pistorius sentence: Athlete's wealth and notoriety provoke an overdue debate on South African prisons
Cameron is warned 'no possibility' of UK reducing immigration and that bid to bring in quota on migrant workers would be illegal
Sorry Judy Finnigan – Ched Evans is no less sickening than an alleyway rapist
Residents should throw a street party and mix with immigrant neighbours, councils told
Workers 'could be forced to pay £5 a week' to get benefits
Russell Brand threatened with arrest after filming outside Fox News headquarters
London bus driver allegedly kicks gay couple off for kissing
iJobs Money & Business
£18 - 23k + Benefits: Guru Careers: We are seeking a Customer Service Executiv...
£60 - 65k + Benefits: Guru Careers: We are seeking a ASP.NET Web Developer / ....
£60,000 - £80,000: Saxton Leigh: Our client is an leading Asset Manager based...
£27000 - £32000 Per Annum: Clearwater People Solutions Ltd: Our large charity ...