Market Report: Insurers catch a cold in bad weather

INSURANCE shares were under the weather yesterday as the stock market fretted about the expected deluge of damage claims following this week's floods and storms.

The sector also had to contend with a surprise pounds 70m convertible bond from Royal Insurance and talk that some income funds are becoming increasingly worried about the dividend payments of insurers.

(Graph omitted)

The sudden bout of anxiety pushed Commercial Union down 12p to 595p, General Accident 10p to 578, Guardian Royal Exchange 3p to 174p, Royal 12p to 253p and Sun Alliance 5p to 331p.

Even before this week's inhospitable weather 1992 trading prospects were shrouded in gloom, with the five composites due to report losses. There is little chance of any dividend increase and Royal will more than halve its payment.

The rest of the market got back on the uproad, thanks largely to a big programme trade by Goldman Sachs, the US investment house. The buy-and- sell exercise, thought to be worth pounds 130m, was said to stem from a portfolio reshaping. Among the shares involved were General Electric Co, Lucas Industries, Medeva and Mirror Group Newspapers. With a number of smaller trades evident turnover reached 669.5 million.

The market was also helped by continuing suggestions that a big bid was about to be rolled out. British Aerospace was the latest candidate to be put forward. The shares enjoyed a late run, gaining 14p to 142p in keen trading. Stories that GEC, unchanged at 263p, could be tempted to absorb BAe have often surfaced; Hanson, down 0.5p at 236p following its year's results, is another possible contender for aero honours.

Fisons also caught the bid bug, with Astra of Sweden still in the frame.

But there were also suggestions that two disposals that would wipe out the group's debt were close. The shares gained 10p to 223p.

BTR, thought to be nursing bid intentions, ended 0.5p higher at 518p as an institution unloaded 7 million shares at 516p through Smith New Court. Lucas, regarded as a BTR bid candidate, rose 2p to 136p but Tarmac, another rumoured target, lost 2p to 94p.

GKN, following the UK arms deal with Kuwait, shaded 2p to 417p.

Spring Ram, the bathroom and kitchen group, was at one time down to 82p, following Wednesday's institutional sale of 7.7 million shares at 98p. The shares, 181p earlier this year, closed at 89p, down 11.5p.

The group, according to its company secretary, Paul Weaver, has yet to decide whether to make a statement about its share performance. Talks are going on with its financial advisers. Spring Ram, which has just completed the pounds 12.3m acquisition of Stag Furniture, rattled the market when it disclosed accounting irregularities at a subsidiary.

Alexon, the fashion group, slumped 27p to 98p after it warned that trading was poor and market estimates of about pounds 7.5m were over the top. Khaleeq Taimuri of Carr Kitcat & Aitken cut his forecast to pounds 4.5m and warned the final dividend could be lowered from 7.6p to 4p.

The shares, 382p earlier this year, have fallen from 200p since reduced interim profits were announced two months ago.

The Etam fashion chain rose 9p to 240p, reflecting the increased shareholding of Oceana Consolidated, a thwarted bidder.

Internationals were helped by a strong US dollar and American buying. Imperial Chemical Industries enjoyed the added bonus of anticipation of Monday's presentation by Zeneca, its drugs division expected to be demerged next year.

Courtaulds, up 5p at 544p, and British Vita, 11p at 236p, drew support from analysts' visits, and Boots improved 5p to 530p following an SG Warburg investment presentation.

Hong Kong-related shares, after early weakness, recovered on hopes the colony's share market, weak on growing tension with China, will rally today.

HSBC, the banking group, at one time down 24p, ended 5p higher at 485p. Cable and Wireless rose 7p to 650p.

Reuters, the information group, jumped 25p to 1,376p, a peak, on US buying and hopes of a share split.

Wickes, down 2p at 75p, placed 13.5 million shares at 72.5p through Warburg to finance its store opening programme.

Pepe, the hard-pressed jeans group, lost most of Wednesday's advance based on rumours, later denied, of a reverse takeover by Joe Bloggs. The shares fell 3.5p to 7.5p.

Shares failed to hold their best levels, with the FT-SE 100 index, at one time up 13.6 points, ending 6.9 higher at 2,771. The FT-SE 250 index rose 4.1 to 2,654.9. Trading volume reached 669.5 million shares, with 25,783 bargains logged. Government stocks rose by up to pounds 11 2 , encouraged by German demand

Shares of Owners Abroad, the holiday group, were keenly traded, climbing 1p to 72p. Two months ago it admitted that takeover talks were on, and there is growing speculation a deal will be announced next week. OA executives have held meetings in Germany this week. The German group LTU, owner of Thomas Cook, is the favourite to capture OA.

Upmarket furnishers and fabric distributors Colefax & Fowler suddenly came to life yesterday with the rarely traded shares, reflecting five sizeable deals, moving ahead 8p to 34p. They touched 70p earlier this year. Profits have been under pressure and a little-changed out- turn of pounds 700,000 is expected this year. Takeover action could be on the horizon.

Start your day with The Independent, sign up for daily news emails
ebooks
ebooksA celebration of British elections
  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Claims Administrator

£16000 - £18500 per annum: Recruitment Genius: This is an excellent opportunit...

Recruitment Genius: Senior SEO Executive

£24000 - £28000 per annum: Recruitment Genius: A Senior SEO Executive is requi...

Recruitment Genius: Online Customer Service Administrator

£16000 - £18000 per annum: Recruitment Genius: An Online customer Service Admi...

Recruitment Genius: Digital Marketing Executive

£18000 - £22000 per annum: Recruitment Genius: This global, industry leading, ...

Day In a Page

Fishing for votes with Nigel Farage: The Ukip leader shows how he can work an audience as he casts his line to the disaffected of Grimsby

Fishing is on Nigel Farage's mind

Ukip leader casts a line to the disaffected
Who is bombing whom in the Middle East? It's amazing they don't all hit each other

Who is bombing whom in the Middle East?

Robert Fisk untangles the countries and factions
China's influence on fashion: At the top of the game both creatively and commercially

China's influence on fashion

At the top of the game both creatively and commercially
Lord O’Donnell: Former cabinet secretary on the election and life away from the levers of power

The man known as GOD has a reputation for getting the job done

Lord O'Donnell's three principles of rule
Rainbow shades: It's all bright on the night

Rainbow shades

It's all bright on the night
'It was first time I had ever tasted chocolate. I kept a piece, and when Amsterdam was liberated, I gave it to the first Allied soldier I saw'

Bread from heaven

Dutch survivors thank RAF for World War II drop that saved millions
Britain will be 'run for the wealthy and powerful' if Tories retain power - Labour

How 'the Axe' helped Labour

UK will be 'run for the wealthy and powerful' if Tories retain power
Rare and exclusive video shows the horrific price paid by activists for challenging the rule of jihadist extremists in Syria

The price to be paid for challenging the rule of extremists

A revolution now 'consuming its own children'
Welcome to the world of Megagames

Welcome to the world of Megagames

300 players take part in Watch the Skies! board game in London
'Nymphomaniac' actress reveals what it was really like to star in one of the most explicit films ever

Charlotte Gainsbourg on 'Nymphomaniac'

Starring in one of the most explicit films ever
Robert Fisk in Abu Dhabi: The Emirates' out-of-sight migrant workers helping to build the dream projects of its rulers

Robert Fisk in Abu Dhabi

The Emirates' out-of-sight migrant workers helping to build the dream projects of its rulers
Vince Cable interview: Charging fees for employment tribunals was 'a very bad move'

Vince Cable exclusive interview

Charging fees for employment tribunals was 'a very bad move'
Iwan Rheon interview: Game of Thrones star returns to his Welsh roots to record debut album

Iwan Rheon is returning to his Welsh roots

Rheon is best known for his role as the Bastard of Bolton. It's gruelling playing a sadistic torturer, he tells Craig McLean, but it hasn't stopped him recording an album of Welsh psychedelia
Morne Hardenberg interview: Cameraman for BBC's upcoming show Shark on filming the ocean's most dangerous predator

It's time for my close-up

Meet the man who films great whites for a living
Increasing numbers of homeless people in America keep their mobile phones on the streets

Homeless people keep mobile phones

A homeless person with a smartphone is a common sight in the US. And that's creating a network where the 'hobo' community can share information - and fight stigma - like never before