Market Report: Halifax soars on hopes of more cash windfalls

Click to follow
Halifax dominated the dealing screens. The building society-cum- mortgage bank surged to a peak, up 31p at 977p. At one time the shares stood at 984p.

Hopes of a bumper payout when the group reports year's figures today were behind the excitement.

There is talk that besides an 18 per cent dividend increase to 17.5p, Halifax will spray as much as 40p a share in the form of a special dividend among its shareholders.

It is stuffed with cash - perhaps as much as pounds 4bn above its needs. Some suggest it will accompany its figures, underlying profits should be up 15 per cent at pounds 1.64bn, with a predatory strike.

A host of would-be targets have been mentioned, ranging from unit trust group M&G to a pounds 12bn share exchange assault on Norwich Union, the insurer which, like Halifax, floated last year.

M&G held at 1,552.5p and Norwich went to another peak, up 7p at 523p (after 530p).

The rest of the stock market stretched to new highs with Footsie closing for the first time above 5,800 points.

The search for shares overlooked in the long bull run kept prices on the boil. The recent round of corporate action as well as rumours of more to come, a firm New York opening and the feeling interest rates will be pegged again this week were other influences.

Optimism was encouraged by two significant Footsie upgrades. SG Securities raised its year-end target from 5,350 to 6,000 and Panmure Gordon went from 6,000 to 6,600.

Footsie's volatility, however, was underlined by a late 25.4 fall, leaving the index 53.3 up at 5,820.6.

WPP, the advertising agency, illustrated the way order-driven trading was continuing to heighten the uncertainty over closing Footsie prices.

Dealings in the shares were suspended as the market closed with the buying price at 310p against 304p on the sell side. It seems a spaghetti-fingered trader pumped in the wrong price and was prevailed upon to withdraw the order during what is known as the "housekeeping" period.

So, after the market had closed, WPP sported not a solitary buy order but a sell at 304p. The last order-driven trade was at 315p and that was regarded as the closing quoted price.

WPP is not a Footsie stock and, therefore, played no part in the index calculation. BTR, the conglomerate which moved nearer its ambition of becoming a focused engineering group, was the best performing constituent. After a long, depressing underperformance, it jumped 25.75p to 187p, highest since December, following the pounds 2.2bn sale of its packaging operations and the promise to return pounds 2bn to shareholders.

Energy, the Eastern electricity group, also contributed to Footsie's exuberance, gaining 28p to 806p as Texas Utilities offered pounds 4.3bn in cash, adding to the the investment community's already overflowing cash coffers.

Building materials continued to benefit from re-ratings with Blue Circle Industries 38.75p higher at 394p. Merger talk lifted Hepworth 12.5p to 237.5p and rumoured partner Marley gained a further 2p to 112.5p.

Next, following the signalled departure of Lord Wolfson of Sunningdale as chairman, fell 36p to 792.5p. He will be replaced by Sir Brian Pitman, chairman of Lloyds TSB. The Wolfson link had been viewed as a possible bridge for a merger between Next and Great Universal Stores, where his lordship is also chairman.

General Electric Co gained 11p to 408p on unsubstantiated talk of a 525p target being set and Rentokil Initial climbed 11.25p to 311p on Merrill Lynch support.

Lasmo, ahead of investment presentations, flared 10.5p to 286.75p and British Petroleum put on 23p to 861p on Salomon Smith Barney support.

Engineer FKI hardened 15p to 194p as an alleged stock overhang was cleared; Rolls-Royce rose 9.5p to 242p ahead of Thursday's results.

Diageo firmed 14.5p to 638p on reports of a rich Dewar's sale price with Allied Domecq, seeming out of the running, off 18.5p at 567p.

Spring Ram, the bathrooms group reporting today, added 2.75p to 22.75p on reports stockbroker Colin Blackbourn had picked up 1 per cent. However, it could be something of a "spring ramp".

Mr Blackbourn, famed for the response to his 3.1 per cent shareholding in Tadpole Technology, did have 1 per cent but has since sold most of his shares.

Honeysuckle, the fashion group, fell 3p to 15.5p after disclosing it was in refinancing talks.

Speculative buying pushed Cox Insurance 23p higher to 328p. A year ago the shares were 149.5p.