Market Report: Disposal of Royal Bank shares adds excitement

SHARES in Royal Bank of Scotland provided some late excitement yesterday, with 20 million put on offer at just below the market price.

The shares are understood to have come from one Scottish institution and were placed through Credit Lyonnais Laing.

Royal closed 4p adrift at 290p. The shares were soon found several new homes, and total volume exceeded 41 million.

Barclays, meanwhile, remained in demand following the recruitment of Martin Taylor from Courtaulds Textiles as chief executive.

The bank's shares broke through 500p at one time before some profit- taking cut the advance to 5p to 4965p at the close. More than 5 million were traded.

Courtaulds Textiles continued to recover following the initial mauling suffered on Thursday, and closed 6p higher at 554p.

Courtaulds, the chemicals company that will share its chairman, Sir Christoher Hogg, with the demerged textiles half, eased 3p to 569p.

Trading activity generally remained at a reasonably high level as the market turned the first corner of the long three-week account.

More than 630 million shares were traded, taking the week's total turnover to 3.6 billion. Yesterday's bargains topped 33,000.

Share prices, though, lost ground towards the close with Wall Street opening lower following the record- breaking performance on Thursday.

The FT-SE 100 share index, which was 12.2 points higher shortly before lunch, lost 7.9 points to 3,057.6. A 3.6 point drop to 3,482.4 was recorded by the FT-SE 250.

Longer dated gilts lost around a quarter of a point despite hopes that the Bundesbank could cut German interest rates next week. Many dealers, however, believe that a further reduction in UK rates will not materialise until the Budget in November.

There was a general mood of consolidation yesterday, with few big investors prepared to make heavy commitments at such an early stage in the account.

Early trading was also subdued as dealers awaited the expiry of the August Footsie futures contract. A successful roll-over of the contract was swiftly followed by increases in equity prices.

Not all of yesterday's American influence was negative. Vodafone, which was already buoyed in early trading by a Warburg recommendation, advanced by 15p to 562p with US investors keen to buy. More than 6 million were traded.

Food retailers did better than most, benefiting from speculation that Warburg was prepared to issue a warrant covering a basket of shares in the sector.

The best advances in the sector were made by Kwik Save, up 5p to 738p, J Sainsbury, which rose 6p to 5224p, and Argyll Group, also favoured by UBS, which improved by 6.5p to 353.5p. Tesco, however, eased 2p to 238p.

Among the food manufacturers, Cadbury Schweppes dipped 8p to 493p on its plans to buy Prudential Insurance Company of America's 20.2 per cent shareholding in Dr Pepper/Seven-Up of the US.

Analysts said the deal would dilute earnings per share by 2 to 3 per cent in 1994, but would make little impact during the current year.

United Biscuits, long tipped as a takeover target for Cadbury, slipped 10p to 381p.

Water utilities, favoured of late on yield considerations, were subjected to some light profit taking. Northumbrian eased 1p to 638p as did Thames to 540p, while Welsh gave up 3p to 628p.

Breweries, which have largely missed out on the market's recent strength, had a better day.

Bass firmed 4p to 515p on further talk that it was lining up to buy Chef & Brewer from Grand Metropolitan, a penny easier at 449p.

Allied-Lyons rose 7p to 615p, and Scottish & Newcastle added 2p to 465p.

A 4p rise to 349p greeted GEC's announcement of a dollars 2.4bn South Korean high-speed rail project with its French joint-venture company GEC Alsthom. Shares have been put on James Capel's buy list.

James Wilkes fell 5p to 106p as hopes of a takeover move by Suter, up 2p to 185p, started to fade.

Mersey Docks lost 4p to 372p on its merger talks with Medway Ports. Forth Ports, up 2p to 305p, and Powell Duffryn, off 6p to 658p, are also in the running for Medway.

Andreas Ugland bought a further 4,400,000 ordinary shares in Bristol Channel Ship Repairers at 10p each. Shares were previously owned by a subsidiary of CH Bailey, up 0.25p to 6.75p.

Ugland now has a holding of 23.7 million, equal to 29.7 per cent of Bristol's issued capital.

Prices eased back again yesterday as the first week of the long bank holiday account drew to a close. The FT-SE 100 index lost 7.9 points to 3,057.6. More than 633 million shares were traded. The account ends on 3 September with settlement on 13 September.

Nearly 8 million shares in Kleinwort Benson, the merchant bank, were placed at 498p each. American Insurance Group, viewed as a long-term investor, was said to be the seller of the 6 per cent holding. Shares were believed to have been placed with several institutions through SG Warburg. Kleinwort's shares, which eased 2p as the block hit the market, finished the session 1p firmer at 508p.

A dull trading statement at Marston, Thompson & Evershed's annual meeting hit the regional brewer's shares. Marston said the summer weather had not been as kind as it had hoped, and trading generally remained difficult. Takings in the managed pub estate have been depressed, although sales to the free trade have improved on last year. The share price closed 8p lower at 283p.

Phoenix Timber was felled by Thursday night's after-hours announcement of a rescue rights issue. The company said banking covenants had been breached and it would have to make big provisions for the year to last March. The pounds 1.44m, five-for-eight rights is at 8p per share and has been underwritten by Co-operation Retirement Benefit Fund. Shares collapsed by 50 per cent to 12p.

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