Market Report: C&W shows that mobiles can shine

IT'S GOOD to talk - at least when the mobile phone industry is the subject of debate. Just 24 hours after the stock market seemed intent on disconnecting cellular radio shares, there was a rush to buy Cable & Wireless, the One-2-One group.

The shares jumped 34p to 584p after an upbeat investment presentation which will almost certainly prompt analysts to lift their profit estimates.

On Monday mobile phone shares were hit by worries that the industry regulator intended to probe the business and was set to adopt a much tougher line on competition.

Even the Oftel involvement was dismissed as the stock market had second thoughts and analysts made positive noises. Investment house BT Alex.Brown said it would use any weakness as a buying opportunity and suggested the industry would show record growth adding more than 850,000 subscribers in the normally quiet summer period.

The investment house likes BT, Orange and Vodafone and Dresdner Kleinwort Benson backed Orange, suggesting a 740p price (unchanged at 567p).

C&W appeared to underline the market's optimism. Worldwide subscribers at the end of March totalled 2.9 million and on the domestic front One- 2-One had almost 680,000. There is also talk of corporate action at C&W, perhaps an increase in its One-2-One involvement.

Not surprising, then, that telecom shares should enjoy a much firmer session with BT, up 3p at 790p, and Vodafone 3p to 701p. Securicor, owner of the minority interest in the Cellnet mobile phone group, improved 14p to 381p as stories still buzzed around that BT, which has the controlling 60 per cent of Cellnet, was near to clinching the Securicor stake.

The rest of the stock market tended to be cautious ahead of the US interest- rate decision. Footsie, at one time down 50 points, managed a modest 15.2 gain to 5,108.7 at the close and the mid cap rose 9 to 4,562. But there was, once again, absolutely no joy for small cap companies. Their index slumped a further 6.7, pushing it below 2,000 points for the first time since January 1996. Footsie managed to edge ahead despite another round of cautious comments from analysts.

Engineer Siebe was an exception. The shares gained 9p to 198p after Lehman Brothers said double-digit earnings growth was set to continue and the shares were up to 40 per cent undervalued.

British American Tobacco, British Steel and Pilkington were among shares to get the red pencil treatment from analysts.

Reuters, due to meet analysts after the market closed, fell 12p to 500p and Safeway, the supermarket chain, was cut 12.5p to 292.25p, a two-year low, on worries a downbeat trading statement could materialise.

Diageo, the spirits giant which has been weak, improved 48.5p to 547p on hopes of a US interest rate cut. The shares have slumped from 778.5p since July. Bass, another drinks group to suffer a hangover, recovered 29p to 704p with Morgan Stanley making positive noises. Losses at Coca- Cola Beverages subdued the shares 21.5p to 134p.

British Energy surrendered 17.5p to 582.5p, reflecting vague talk it could buy Yorkshire Electricity

Airtours, the holidays group, climbed 21.5p to 324p after rumoured investment meetings and Business Post, the delivery group, had another steadier session, recovering a further 36.5p to 314p.

Capital Radio was on the wrong wavelength after Sutherlands cut its profits estimates. The stockbroker is looking for pounds 38.5m, down from pounds 41.7m, for the year just ending and for pounds 42.5m (pounds 45.1m) for next year. The shares fell 18p to 465p.

Oil giant Shell remained under the whip of its recent profits warning and little JKX Oil & Gas lost 6.5p to just 11p (the shares once topped 200p) after Ukrainian currency restrictions prompted the oil company to delay its figures.

Alpha Airports, results tomorrow, flew 8p higher to 47p and Chiroscience improved 16.5p to 264p on the discovery of a gene which could help the body's immune system.

Profit warnings continued to flow. Feedback, an electronics group, fused 7p to 18p as it warned of a loss and electrical group Bulgin lost 7.5p to 90p after saying it may not break even in its second six months. But Christie, the estate agent, rose 4.5p to 50p with comments that profits were "well ahead" of last year.

Yates Brothers Wine Lodges hit a new low, off 25.5p to 220p.Greenalls downbeat trading statement did the latest damage to Yates shares, which were 558.5p earlier this year.

Car Group, the stricken second-hand car dealer, managed to halt its reverse, recovering a token 0.25p to 2.25p; doubts about its refinancing remain. Hopes of a reverse takeover at Superframe, the retail display group, put a further 1.5p on the shares at 19p.

SEAQ VOLUME: 970.2 million

SEAQ TRADES: 56,417

GILT INDEX: n/a

SHARES OF TBI, the property and airports group, climbed 5.5p (after 8p) to 98.5p in busy trading; their peak, hit in June, is 129.5p. Proposed analyst meeting are thought to be responsible for the share strength. The group, formerly Markheath Securities, is thought to be intent on taking analysts to three of its airports, including its Florida operation. In June TBI paid pounds 17m for Skavsta airport, near Stockholm.

BRITISH THORNTON firmed to 25p although losses were as bad as feared - pounds 5.3m. But the reshaped group is trading profitably, has pounds 1.5m cash and is seeking acquisitions. Stockbroker Beeson Gregory expects profits to hit pounds 1.75m this year. The company is controlled by chief executive Trevor Semadeni who has 53 per cent of the capital after a reverse take over involving Planit which supplies software point of sale packages to retailers