MARKET REPORT: Food retailers lose weight over fears of a price war
Tuesday 28 January 1997
There is considerable debate about whether an old-fashioned, no-holds- barred confrontation will actually emerge. Most observers think such a development unlikely.
But J Sainsbury could be the catalyst for the feared wave of price cuts. Its dismal trading performance has to be arrested and although it is not a natural price cutter its desperation to recapture its top position could provoke it into adopting a much meaner pricing policy.
Such thoughts left food retailers in need of sustenance.
Sainsbury fell 9p to 332p in busy trading; the shares were at one time down 11.5p. Safeway lost 13.5p to 376p and Tesco 5p to 355p.
Budgens retreated 1p to 43.75p and WM Morrison slipped 1.5p to 151.5p. Asda, the day's busiest traded share, dropped 1.25p to 120.25p and Kwik Save suffered a 6.5p decline to 300p.
The rest of the market appeared to recover from its panicky retreat on Friday and Footsie ended an insignificant 6.8 points lower at 4,212. The supporting FTSE 250 index lost 4.9 to 4,593.1.
Drugs remained one of the healthier sectors. What could be regarded as unrealistic takeover rumours continued to circulate with SmithKline Beecham again leading the charge with an 11.5p gain to 874p.
Roche, the Swiss group, is never far from the takeover rumour mill and remains a candidate to link with SmithKline, albeit through an agreed deal rather than a hostile bid. Schering-Plough, a US group, has also been drawn into the speculation. Zeneca remains in the frame, edging forward 8.5p to 1,693.5p.
Glaxo Wellcome added 8.5p to 957.5p on Aids drugs development hopes and Xenova, forging a research link with US giant Bristol-Myers Squibb, jumped 25p to 295p. The shares have had an eventful ride since arriving last month at 215p and falling to 193.5p before rallying.
Rentokil Initial was the best- performing blue chip, improving 10p to 452.5p, a peak. Others in form included Imperial Chemical Industries, Orange and, once again, Hanson.
Cable & Wireless, an investment presentations due, edged forward 2.5p to 480p. and Vosper Thornycroft rose 7.5p to 936p on hopes of a pounds 700m United Arabs Emirates order.
Newman Tonks jumped 29p to 280.5p as Ingersoll-Rand, the US group, produced a near 180p cash offer, topping the shot from the FKI engineering group.
Norbian, a closed circuit television group, provided the day's profits shock, crashing 106.5p to 332.5p.
English National Investment Co continued its remarkable progress, gaining 26.5p to 257.5p. The Joseph Lewis vehicle has jumped 134p since it was disclosed it had an option on his 25.1 per cent pounds 40m stake in Glasgow Rangers.
Lanica Trust was another in demand. The high flyer, which touched 2,050p last month, rallied 162.5p to 1,737.5p as rumours continued to buzz that Andrew Regan, the young entrepreneur in command, has a number of intriguing deals up his corporate sleeve.
Prism Leisure, the computer games group, rose 15.5p to 140.5p. Half-year figures, followed by the first meeting with analysts for some time, are expected later this week. Profits last year were pounds 2.1m with pounds 684,000 coming at the interim stage.
John Lewis of Hungerford, no relation to the stores and supermarket partnership, made a firm debut. The furniture company ended at 3.75p against a 3p placing.
Chelsea Village, the football club, gained 4.5p to 123p. It followed up its on field exploits by placing a further batch of shares. Through its stockbroker Ellis & Partners 1 million were sold at 120p. As in the past the Ellis fee was met by the issue of shares - this time 25,000.
The club has also agreed to issue 126, 532 shares to captain Dennis Wise at 118.5p and another 500,000 are earmarked for Graham Bell, who has helped develop the club's youth team. He is taking up 250,000 at 106.5p.
Takeover hopes returned to lift SR Gent, the clothing supplier to Marks & Spencer, 6p to 56.5p.
Two bidders are said to be in the wings - one of them an Indonesian company.
Another where takeover hopes hover, United Energy, rose 2.5p to 24p. There is talk of bids and a tender offer.
Rowlinson Securities, a low-profile but successful building and property group, is rumoured to be in a predator's sights. The shares, a narrow market, rose 30p to 227.5p, a peak. They were 123p in the spring. Based at Stockport the company is run by the Rowlinson family; any takeover would need the family's say-so.
Aminex, with oil interests in the former Soviet Union, was little changed at 65p. Deutsche Morgan Grenfell has placed, through Henderson Crosthwaite, its 6 per cent shareholding.
Intriguing goings-on at National Home Loans Holdings. The shares rose 2p to a closing peak of 145.5p. But in late trading a flurry of delayed deals went through at 148p. Volume was strong; 2.4 million shares.
- 1 Tourist films plane's descent just metres above packed Caribbean beach
- 2 Indian woman creates 'Marriage CV' after parents put her on dating site: 'Definitely not marriage material. Won’t grow long hair, ever'
- 3 World Book Day: Boy 'excluded' from school after dressing up as Fifty Shades' Christian Grey
- 4 Bad Jews poster 'censored' on London Tube
- 5 Have sex with your iPad thanks to the new sex toy no-one asked for
Tourist films plane's descent just metres above packed Caribbean beach
Indian woman creates 'Marriage CV' after parents put her on dating site: 'Definitely not marriage material. Won’t grow long hair, ever'
Isis 'bulldozes' Nimrud: UNESCO condemns destruction of ancient Assyrian site as a 'war crime'
Professor Brian Cox brands astrology-believing Tory MP David Tredinnick an 'outlier on the spectrum of reason'
Lynch mob kills suspected rapist in India after dragging him naked for four miles through city
Nearly 100,000 of Britain's poorest children go hungry after parents' benefits are cut
Durham Free School: 'Creationism taught at' free school facing closure
End of the licence fee: BBC to back radical overhaul of how it is funded
Elif Shafak: Turkish author warns against rise of British nationalism
Ex-head of MI6: 'We shouldn't kid ourselves that Russia is on a path to democracy'
Most people think legal tax avoidance is just as wrong as illegal tax evasion, poll suggests
iJobs Money & Business
£13000 per annum: Recruitment Genius: This is an exciting opportunity to join ...
£25000 - £30000 per annum + benefits: Ashdown Group: A global leader operating...
£12 - £15 Hourly Rate: Jemma Gent: In this role you will report to the Head of...
£8 per hour: Recruitment Genius: This Pension Specialist was established early...