Market Report: Market takes the base rate rise in its stride

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The Independent Online
IT WAS as if the base rate increase had been expected. The stock market took the shock uplift in its stride, deciding it was not such an unexpected move after all, and then enjoyed pouring cold water on all the twaddle produced by the highly paid economists which, to a man, had steadfastly asserted rates would be pegged at yesterday's Monetary Policy Committee meeting.

At one time Footsie was down 77.6 points. It ended off a mere 37.6 at 5,860.8 with the modest base rate uplift largely ignored. Supporting shares were mixed although the mid cap index managed to produce a modest gain. Probably the worst hit were Government stocks, off by around a point.

Railtrack, perhaps the most unpopular Tory share flotation, had another express run. The shares jumped 74p to 1,348p, a peak, as the stock market warmed to its rail link deal. A veritable host of profit and prospect upgradings went the rounds with a CSFB prediction of a 1,630p target creating the greatest impact.

Halifax, off 17p to 840p, had a difficult session. ABN Amro, the Dutch owned investment group, repeated its sell advice. ABN's Robin Down said a fair value was around 700p a share. He is worried about the mortgage competition and has cut his 1990 forecast by more than pounds 100m to pounds 1.77bn.

Carlton Communications jumped 15p to 510p on Merrill Lynch support and a US road show. Engineer Siebe firmed to 1,342p as Salomon Smith Barney talked about the price reaching 1,650p.

Vaux, the Sunderland-based brewer and hotelier, was a major feature after it revealed a bid approach. Its Swallow hotels spread is thought to be the asset interesting the predator, possibly Stakis, down 2p to 135p. American Patriot, the group which acquired the Arcadian International hotel chain, is regarded as another possible predatory candidate.

Storehouse, following the Henderson Crosthwaite investment dinner, rose 5.5p to 280p, a 12-month high. Kingfisher, enjoying the HC treatment last night, fell 13p to 1,067p.

Bellwinch, the house builder, was unchanged at 28.5p as construction group Keir, with 23.6 per cent, decided not to dilly and dally but bid; it is offering 30p a share, pricing the group at pounds 13.5m.

Hardy Oil & Gas is tapping shareholders for pounds 79.1m and fell 15p to 246.5p. Martin International, a clothing group seeking pounds 5.5m, lost 3p to 40p.

Wiggins, the property developer with airport ambitions, hardened 1p to 14.75p after raising pounds 1.45m through a placing which seems to have enlisted American William McCabe, who appears to be intent on furthering Wiggins' airport ambitions.

BTG, the licensing group, jumped 24p to 736.5p as it duly confirmed its plans to float its Torotrak transmissions unit.

Advertising group WPP was little changed at 423p. Martin Sorrell, chief executive, collected the fourth and final tranche of a multi-million pound pay-for-performance package linked to the group's share price. He received just under pounds 20m in WPP shares. It was, of course, Mr Sorrell's buying spree which, it could be argued, took WPP to the verge of bankruptcy.

Quantica, a recruitment group representing the latest spin-off from Gartland Whalley & Barker, moved from a 124p placing to 150.5p.

Integrated Asset Management, the investment group which lost heavily in an abortive bid to buy Manchester stockbroker John Siddall, returned to market at 37.5p. The shares were frozen at around 130p for the Siddall deal which was destroyed when the Manchester business, in effect, went belly up. IAM, once largely Swiss owned, accompanied its return with a pounds 1.92m loss.

Tradepoint, the stock market in miniature, continued to create worries. At one time the shares were down 7.5p to a 23.5p low, following a bargain at 24p for just 10,000. The price ended at 25p.

Luminar, the trendy pubs group, hit 925p, up 80p. Profits of the Chicago Rock Cafe chain surged 32 per cent. The shares were 244p two years ago.

Ronson, the luxury goods group, hardened 0.5p despite the departure of four non-executive directors.

Dean Corporation, the property services group, firmed 1.25p to 15p. Stockbroker Teather & Greenwood forecasts a sharp profits advance to pounds 1.9m this year and then pounds 3.5m. Analyst David Taylor feels that Dean, an attractive mix of business, is undervalued.

Little department store chain Upton & Southerns, which has endured a series of setbacks in recent years, edged ahead 0.25p to 3p. There are suggestions that the group, in urgent need of a dramatic development is near to completing a significant deal. In the past year the shares have managed to reach 3.75p; five years ago they touched 66.25p.