Market Report: Drug companies shake off Asian flu
Saturday 13 June 1998
Speculation that a further round of consolidation was about to hit the industry ensured the leading groups continued to attract attention.
SmithKline Beecham led the way. The shares gained a further 19p to 737p in busy trading as a variety of stories swirled around. At one time they were up 52p. This week SB has experienced heavy trading with the shares rising 68.5p.
The stock market seems intent on putting SB in the same ward with Glaxo Wellcome. Rumours that the two will get together continue to circulate. There is a suspicion Glaxo is prepared to mount a hostile strike if it cannot get even reluctant agreement from SB.
Earlier merger moves ended acrimoniously with the two sides indulging in increasingly bitter exchanges.
The future management structure of the proposed pounds 110bn group was the main stumbling block and the latest rumours included the provision that Jan Leschly, SB's chief executive, would resign before the deal was completed.
But SB, which accused Glaxo of trying to force out Mr Leschly during the previous talks, denied he was stepping down. A spokeswomen said: "Jan Leschly is not planning to resign. He is at his desk today in Philadelphia. It is business as usual, and he will be at his desk in the UK on Monday".
She added: "We are a strong independent company and we do not need a merger".
Glaxo ended 2p higher at 1,742p after an early 95p surge.
Zeneca also bucked the sick market trend, gaining 32p to 2,602p. Nycomed Amersham, up 17.5p to 418.5p, and Medeva, 1p firmer at 178.5p. were other pharmaceutical groups on the uproad.
The Footsie, after slipping 102.2 points, ended nursing an 82.7 fall at 5,769.8, the lowest for six weeks. At one time it was up 48.1.
Supporting indices also felt the strain; the mid cap fell 55.8 to 5,861.2 and the small cap 11.4 to 2,756.
Besides the Asian worries the market was perplexed by the continuing strength of sterling and its obvious impact on overseas earners. Smiths Industries, British Aerospace and General Electric Co were in the front line. British Steel, expected to produce pound-ravaged results on Monday, fell 5p to 135p. Its year's profits are likely to be around pounds 270m against pounds 433m.
Financials were pulled even nearer to earth. Schroders lost 137p to 1,610p and Halifax 22p to 805p. Northern Rock was unsettled, down 25p at 560p, with ABN Amro and HSBC lowering their expectations.
Insurer GRE, hit by Cazenove on Thursday, retreated a further 14p to 360p as Panmure Gordon and SG Securities downgraded.
Associated British Foods lost an early gain, inspired by ABN Amro interest, to end 15p down at 560p.
Pilkington, the glass maker, cracked again, off 3.5p to 128.5p as Albert E Sharp expressed caution.
Cable & Wireless Communications fell 4p to 470.5p as the placing price was fixed at 460p. BCE, the Canadian group, sold its 14.25 per cent stake.
Next, the clothing retailer due to fall out of the Footsie, was little changed at 555p on reports, subsequently denied, that Simon Wolfson, son of the former chairman, is being groomed to succeed David Jones as chief executive.
Commodities group ED & F Man, on analytical support following results, gained 24p to 304.5p.
Newcomers ignored the gloom. Itnet, a computer group, ended at 413p from a 350p placing and Goldshield, a pharmaceutical group, closed at 206p against 180p.
Car Group produced the session's trading hit. The shares reversed 85.5p to 106p on a profit warning. Albert E Sharp quickly turned cautious on Quicks, off 8p at 155.5p, and said Arriva, down 17.5p to 442p, and Dixon Motors, off 11p at 162.5p, looked vulnerable.
IES, involved in cash-point security, fell 20p to 48.5p after confirming its year's loss would be around pounds 740,000.
Haemocell was suspended at 3.5p. In what would appear to be a reverse takeover the blood transfusion group is getting together with unquoted Surgical Innovations, which develops surgical intruments.
Omnimedia, suspended at 2.25p, is also involved in a reverse deal. It is being used as a vehicle for SEC, an IT consultancy, to come to market.
Troubled engineer Powerscreen put on 30p to 100.5p and furnishings and wallpapers group Osborne & Little, on results and a special dividend, jumped 72.5p to 647.5p.
Drugs group Cortecs, which this week sacked founder Glen Travers, edged 7.5p higher to 113.5p. The company has won clearance from the US Food and Drug Administration for its ulcers and stomach cancer tests.
- 1 Three of Pope Francis' relatives die in Argentina car crash, including two young great-nephews
- 2 Michael Brown shooting: Amnesty International sends team within US for first time as National Guard deployed
- 3 Here’s the damning letter Robin Williams wrote to his Mrs Doubtfire co-star's principal after they expelled her
- 4 Ferguson protests: 90-year-old Holocaust survivor Hedy Epstein ‘arrested’ by police during St Louis demonstrations
- 5 Cilla Black defends Cliff Richard: 'I am positive that the allegations are without foundation'
Syria conflict: President Assad finally turns on Isis as government steps up campaign against militant strongholds
Michael Brown shooting: Amnesty International sends team within US for first time as National Guard deployed
Ice Bucket Challenge: Lady Gaga, Justin Bieber and Oprah – the most entertaining reactions so far
Iraq crisis: Islamic State's message to America - 'We will drown you all in blood'
Ferguson: In the heartlands of America, a descent into madness
Isis threat: Cameron wants an alliance with Iran
Crisis? What crisis? A visiting US doctor gives the NHS a rave review
Ukip MEP calls for reintroduction of death penalty on fiftieth anniversary of last deaths
Russell Brand calls for Israel boycott: Comedian urges big businesses that 'facilitate the oppression of people in Gaza' to pull funding
Michael Brown shooting: Chaos erupts on the streets of Ferguson after autopsy shows teenager was shot six times – twice in the head
World peace? These are the only 11 countries in the world that are actually free from conflict
iJobs Money & Business
£200 - £290 per annum + competitive: Orgtel: Sales Performance Manager, Key Ba...
£25000 - £30000 per annum + bonus+benefits+package: Harrington Starr: Junior D...
£600 - £800 per day: Harrington Starr: Java/Calypso Developer Java, Calypso, ...
£700 per day: Harrington Starr: Quantitative Developer C++, Python, STL, R, PD...