Only last year, Glaxo was the darling of the stock market. But nowadays uncertainty has replaced supreme confidence and the shares drip lower almost daily.
Glaxo, which started the year at 739, fell 23p to 655p, just 23p above last year's low; SmithKline Beecham lost 15p to 482p and Wellcome 23p to 853p.
The weakness of drug shares is underlined by the strength of the rest of the stock market, with the FT-SE 100 index not far from its peak and the FT-SE 250 index at another new high.
Glaxo is the main casualty. It has been hit by a multitude of doubts. But there may not have been the rumoured heavy US selling. The last calculation, in November, put US interests at 23.8 per cent. Normally a 1 percentage point move provokes an announcement.
The possibility of a bid for Fisons, one of the few drug shares to move ahead, was the latest fear to undermine sentiment. Although few took the story seriously, there are deepening worries that the drugs giant intends to mount a takeover for another international drugs group, possibly Warner Lambert of the US. Although Glaxo is cash-rich, such a strike could force a rights issue.
The group has decided to drive into the over-the-counter drugs market and a big takeover would seem to be the most likely route to adopt.
The arrival of the Clinton administration, and the healthcare role of Hillary Clinton, is not expected to bring much joy to Glaxo in particular, and the drug industry in general.
There are fears Mrs Clinton will hit foreign drug producers, cutting into their often fat margins. Other countries are also expected to reduce their health spending.
To pile on the agony, Glaxo's main drug, Zantac, is said to be under increasing pressure from Losec, produced by Sweden's Astra group, and some fret about the progress of Imigran, the relatively new migraine drug.
As Glaxo shares made outstanding progress in the past two decades many investors have reaped rich rewards, buying once they fell below 700p. But this time there is clearly no rush to buy. Many wonder whether the Glaxo prescription still works.
Wellcome was also pulled into the Fisons takeover frame. So too was Rhone-Poulenc of France. Andrew Porter at Nikko Securities believes Fisons would not command more than 300p a share. They rose 4p to 224p.
After Monday's heroics shares settled down. But trading was again brisk with, in two-way business, many investors still prepared to take the view that an interest rate cut will occur before the March Budget. Rights issue fears were, however, a restraining influence.
Bank shares tended to ignore the DAF collapse, which could force some banks further to increase their bad debt provisions.
Bank of Scotland, even before the DAF announcement, was the subject of a downgrading by Carr Kitcat & Aitken. Analyst Derek Chambers increased his bad debt provision by pounds 30m, reducing his profit estimate to pounds 120m.
Oil shares were mixed. British Petroleum rose 3p to 257p as US shareholdings reached 23.1 per cent. A 6 million British Gas placing by, it appeared, SG Warburg, left the shares 7.5p lower at 284p.
The chemical group Hickson International, up 3p to 214p, was the subject of a 4 million agency cross. One suggestion was that Ken Schofield, the former chief executive now running troubled MTM, was the seller.
The nil paid rights of the leisure group Stakis were also heavily traded with, it was said, some of the Stakis family selling. The rights closed 0.5p down at 10.5p. Hillsdown Holdings edged ahead 3p to 148p on talk it had sold some of its poultry division; Marks & Spencer gained 7.5p to 325.5p as a determined buyer made his presence felt.
Alexon, the struggling fashion group, rose 14p to 88p on bid speculation. The shares have gained 23p in two days. Next, down 3p at 140.5p, denied any interest.
London International Group continued to weaken on the profit downgrades, falling 11p to 238p. But Vodafone Group improved 11p to 390p following a NatWest Securities push on the strong January sales figures.
Powell Duffryn, the reshaped distribution and engineering group, climbed 13p to 510p, a peak. In the past 18 months PD has raised more than pounds 50m selling unwanted businesses, such as quarrying and shipping. It is the leading investor in Teesside Holdings, the consortium created to acquire the Tees and Hartlepool ports.
The FT-SE 250 index climbed to yet another new peak yesterday, gaining 6.5 points to 2,995.3. But the more widely followed FT-SE index of the top
100 shares fell 17.2 to 2,834.4. Volume was 854.5 million shares with 35,604 bargains. Government stocks were little changed
Grand Central Investment Holdings, the Far Eastern food group, is trying to strengthen its position at Armour Trust, the car accessory and confectionery business run by Andrew Balcombe. It appears a stockbroker, representing GCIH, has offered to buy out Armour's biggest shareholders at around the market price, yesterday up 0.5p to 40p. GCIH held at 43p.
Countryside Properties improved 8p to 116p, helped by indications of improving house prices. The housebuilder is known to be trading well above last year's level and profits of pounds 5m are expected against an pounds 11.7m loss. A subsidiary involved in schemes with housing associations and local authorities expects to build 950 homes this year and 1,500 next.Reuse content