Market Report: Cash-call rumours open cracks at Eurotunnel

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The Independent Online
SHARES of Eurotunnel shuddered as stories surfaced that next week's results could be accompanied by a cash call. The price slipped 15p to 490p with, as is usually the case with a Eurotunnel price movement, French interests blamed for the activity.

Close followers of the controversial share are, however, inclined to dismiss the cash-raising rumours. They believe the group will not announce its funding exercise until nearer next year's official opening, currently scheduled for May. But in view of the growing speculation it is possible that Sir Alastair Morton, chairman, will decide to give some indication of just how much the stretched operation feels it must raise next year.

Eurotunnel's discomfort occurred as the rest of the stock market reached a new peak - but only just. The FT-SE 100 index closed up 15.6 points at 3,100.8, just a fraction above its previous record.

But one time it had looked as though the index was destined to stride to a much more majestic level. At its best the FT-SE 100 index was up 31.1 with continuing evidence of US buying. But even a strong New York performance failed to preserve the enthusiasm and prices wilted in the face of some determined profit-taking.

Hope of an interest rate cut was also a factor but, once again, activity in the futures market was a decisive influence.

Futures trading, however, had little impact on the drink sector where the long-suspected changes at Whitbread caused a stir.

The decision to equalise the voting rights at first pushed the low-voting 'A' shares up 36p. They closed unchanged at 534p. The high-voting 'B' shares fell 188p to 1,200p. Whitbread Investment Co., which as part of the reorganisation collects a bid, rose 53p to 743p.

Matthew Clark, buying the Grants of St James's wine business from Allied-Lyons, came back from suspension with a 28p gain to 498p. Allied rose 3p to 579p.

Invergordon Distillers, on American Brands bid hopes, put on another 6p at 294p.

A strong Hong Kong market was another important influence. At one time Cable and Wireless, on the back of its quoted Hong Kong Telecom off-shoot, was up 22p. The shares ended 13p higher at 924p.

Worries over the outcome of the protracted Taiwainese deal again held sway at British Aerospace, down 12p at 399p. In the meantime Robert Fleming Securities sounded a cautious note. The analyst Martin Smith forecast profits of pounds 30m this year and pounds 140m next and suggested profits should be taken.

Profit warnings took their toll. Indications of a possible pounds 8.5m provision left the retailer Amber Day 14p lower at 56p; the advertising group Gold Greenlees Trott fell 50p to 225p after it said the market was expecting too much. In February GGT made a cash call at 235p.

But the Sears retailing group edged ahead 1.5p to 116.5p with Barclays de Zoete Wedd lifting this year's profit estimate by pounds 4m to pounds 130m.

Supermarket groups were back on the rack. Tesco, taking analysts to France next week, fell 2p to 206p.

SmithKline Beecham edged forward 8p to 415p as the FT-SE steering committee debated whether its units should remain in the 100 index. A decision is expected today. Popular guess is that intense lobbying by the SKB camp will prevent the units, up 6p at 367p, being dropped. Rothmans International, also under threat, fell 8p to 644p.

Some large trades were detected. Smith New Court was said to have tried to place 6 million Royal Insurance, down 3p at 325p. But the same investment house appeared to have more luck with MFI Furniture with a 7 million placing. The shares shaded 1p to 146p.

Continuing US interest in Tiphook, the controversial container group, failed to inspire the shares, down 3p at 239p. US ADR holdings now account for almost 50 per cent of the capital.

Cala, the housebuilder, jumped 12p to 108p. The failed British & Commonwealth Merchant Bank has placed its 15.8 per cent stake with institutions.

Drew Scientific, at one time down 7p at 73p, closed unchanged at 80p. After the market closed it issued a trading statement forecasting an pounds 850,000 interim loss. It said the potential for 'rapid growth from 1994 onwards remains strong'.

Towards the close the textile group Coats Viyella jumped 8.5p to 268.5p. The interest was spurred by a decision to redeem its preference shares. Other textile shares rose in sympathy.

Helene, the fashion group, now embracing the Gabicci business, held at 27p. Ian Jermin of Credit Lyonnais Laing rates the shares a buy, forecasting profits of pounds 4.5m this year and pounds 5.8m next.

The FT-SE 100 index rose 15.6 points to 3,100.8 and the FT-SE 250 index gained 13.9 points to 3,471.6. Turnover was 696.8 million shares with 32,449 bargains. The account ends on 15 October. Government stocks moved ahead.

The once-high-flying Kelt Energy put on 3p to 44p as the ubiquitous Australian tycoon Kerry Packer prepared to pump up to pounds 5m into the group. His involvement, however, is unlikely to stretch to pounds 5m. Other shareholders will have first claim on the new shares. But Mr Packer will at least get some as Hubert Perrodo, chairman, is not taking up all his entitlement.

Aberdeen Trust, the investment group joining the emerging markets trust bandwagon, continues to attract interest. The shares edged ahead 1p to 63p as suggestions continued to swirl that corporate action is near. The main institutional shareholder has sold nearly 3 per cent, cutting its stake to 19.3 per cent. Scottish Value remains with 14.69 per cent.