Market Report: ICI at year's low as Goldman unloads shares

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The Independent Online
SHARES of Imperial Chemical Industries dropped to a low for the year yesterday as 2.5 million were sold at 995p.

Goldman Sachs, the US investment house, was behind the action. The origin of the shares was unclear. Most suggested Goldman was acting for a client. Others wondered whether the shares were the hidden residue of the 2.8 per cent ICI shareholding the US house acquired from Hanson at 1,400p each.

There has been intense speculation that Goldman has had difficulty unloading all the shares and has suffered a significant loss on the exercise.

It seems the shares were placed largely in the US, with perhaps a secondary offering in London. ICI, which has been hit by a succession of profit downgrades, fell 24p to 1,003p. Nine-month figures are due next week. These are expected to show a steep decline and analysts are looking for about pounds 525m against pounds 703m.

The rest of the stock market had a tense session with the FT- SE 100 share index at one time down 21.1 points as sterling weakened and the Government's statement on the coal crisis was awaited.

Then an unexpectedly strong New York opening eased the pressure. Hopes that the Government had wriggled enough to avoid a humiliating defeat tomorrow over pit closures added to the display of strength and by the close the index had cut the decline to 1.7 at 2,562.2. Dividend payments were responsible for a 2.79 fall.

The FT-SE 250 index was 5.6 down at 2,380.3.

A late rally by power shares, relieved that the pit closure climb-down would not lead to the generators having to buy more UK coal, fuelled the recovery.

National Power, at one time down 10p, ended 3p higher at 254p. PowerGen, also lowered 10p, was unchanged at 261p. The distributors made headway.

The sneaking suspicion that more interest rate cuts are inevitable in the run-up to Christmas was another steadying influence. Building and building material shares have as yet shown little response to Friday's reduction.

Government stocks had a mixed time, with longs lower as investors switched into shorts and index-linked stocks.

ICI was not the only blue chip to attract a share placing. British Steel held at 60p as James Capel placed 17 million shares around the market level. Tarmac, down 1p at 73p, was the subject of a 2 million placing.

There was also the usual array of downgradings. Hoare Govett clipped BAA by pounds 290m to pounds 275m, largely because of a big increase in transfer passengers, the type of traveller who does not spend much time in bars, shops and restaurants, at Heathrow.

Spurred by intense competition, British Airways is offering Continental passengers special cheap rates to fly the Atlantic, with a quick change of aircraft in London.

UBS Phillips & Drew took its axe to British Airways, lowering its forecasts from pounds 400m to pounds 370m and from pounds 525m to pounds 475m.

BAA shares rose 7p to 724p and BA slipped 4p to 294p.

Barclays was a casualty among banks, falling 16p to 301p as James Capel forecast a pounds 155m loss for this year. But HSBC, embracing Midland Bank, rose 16p to 475p, largely on currency considerations.

TSB Group continued to attract takeover gossip, edging forward 1p to 139p.

Guinness, which held an investment presentation, fell 10p to 517p.

The window maker Heywood Williams fell 15p to 129p after an analysts' meeting and Medeva, the drugs group, held at 176p ahead of an investment gathering last night. Wellcome continued to reflect the Lehman Brothers interest, gaining 12p to 961p.

Sterling's weakness helped some internationals. BAT Industries advanced 14p to 852p. Oils were firm. British Petroleum, helped by a County NatWest push, gained 7.5p to 230p. Burmah Castrol, weak last week, recovered 10p to 628p.

Tomkins shaded 3p to 254p as the market sensed a big acquisition in exchange for shares.

Trinity Holdings, a newcomer, made a firm debut, closing 9p above the offer price at 129p. Vardon, the leisure group, ended at 47.5p against a 535 rule facility level of 52.5p.

ML Laboratories, still awaiting UK approval for its kidney dialysis drug, soared 97p to 950p after touching 990p. British Bio-Technology edged ahead 5p to 437p. The US National Institute for Allergy and Infectious Diseases has recommended its Aids vaccine for clinical trials.

Grampian Holdings was little changed at 79p. County expects a sharp jump in vaccine profits over the next three years.

Shares staged a late rally yesterday. The FT-SE 100 share index, at one time down 21.1 points, closed near its best level at 2,562.2, down 1.7. The FT 30 share index was 5.1 down at 1,867.2. It was, however, a low volume day. Turnover was below the break-even level at 412.9 million shares, with 22,351 bargains.

Expect Associated Nursing Services to link with the investment group Nash Sells & Partners to develop a Glasgow nursing home. Other joint ventures will follow. The link means that ANS avoids the cost of developing the nursing home. The company already manages 13 homes and owns 11. Profits this year should reach pounds 1.75m. The shares held at 150p yesterday.

Slough Estates enjoyed attention yesterday, re-awakening thoughts that perhaps the bombed-out property sector could attract corporate activity. There was active trading, with the shares climbing 10p to 117p. They have been as low as 83p this year. The sterling devaluation and lower interest rates are good for the group, which could prompt a predator.