Market Report: National Power tries to unplug Footsie with 145p dive
Tuesday 16 July 1996
There was nothing untoward at the UK's biggest generator. It had merely picked yet another of those days when the stock market was wilting to reward its own shareholders.
NP's dividend has a gross valuation of 147p and a net worth of 117.6p. The payment, including a special dividend of 100p a share, had been known about for weeks and it was surprising the market was not prepared to factor it into its calculations much nearer the date of declaration rather than wait until the shares went ex-dividend.
No less than 10.2 points were wiped from the FT-SE 100 index by the NP payment. It could, therefore, be argued that NP was responsible for the poor start made by Footsie which, allowing for dividend payments, was in positive territory until a weak New York display had an unexpectedly crunching impact.
Footsie ended the session 30 points down at 3,698.3 with, at least for the time being, hopes of lower interest rates tossed aside .
It was another unhealthy session for hard-pressed British Biotech. Its shares gave up all pretence of holding above the crucial 2.050p rights price, ending 18p down at 2.040p. In response the nil-paid rights collapsed from 18p to just 2p; they were 403p a few weeks ago.
The pounds 143.4m cash call closes tomorrow and there is clearly a very real possibility the underwriters, led by Kleinwort Benson, will for once be forced to earn their rich commissions and take up a large proportion of the shares,
Some have blamed the Bribio rights for much of the disarray in biotech sector. There have been suggestions of cannibalisation as shares have been sold to provide funds for the Bribio issue.
RTZ, the resources giant, had another difficult session as another profit downgrading appeared in the wake of the Sumitomo fiasco. A cut by James Capel left the shares floundering at 900p, off another 16p. Capel has cut from pounds 960m to pounds 840m and from pounds 1bn to pounds 900m. Six weeks ago the shares were 1,074p.
Hanson remained depressed, down to 167p, and BTR suffered another humiliating slide, off 5.5p at 235.5p, another 12-month low. Tomkins, too, fell victim to the conglomerate discontent, losing its recent strength to fall 9p to 254p.
British Energy, already dubbed a privatisation too far, suffered its own form of meltdown. The partly-paid shares managed a modest 3p premium in early trading but collapsed under the weight of Sid selling, ending at 94p after touching 92.5p.
According to Seaq a staggering 163.6 million shares were traded, around a quarter of the market's volume.
It seemed many institutions, allegedly underweight, decided to hold back and let the sheer power of private investor selling turn the Government's last privatisation into the disaster many had for long predicted.
Eurotherm rallied 13p to 547p on chatter departing chief executive Claes Hultman could retain an important role.
Tesco was again haunted by the possibility of a French strike. It now seems as inevitable as a wonky supermarket trolley that it will be tempted into a pounds 2.5bn bid for Docks de France, the beleaguered French supermarket chain. Any such excursion will force Tesco into a hefty cash call.
P&O rose 9p to 492p, apparently reflecting satisfaction with the institutional view chairman Lord Sterling should bid a sad farewell and reports of property sales and hopes of more relaxation on its ferry operations.
Ahead of today's expected Civil Aviation Authority pricing package BAA, the airports group, fell 7p to 478p. ViewInn, the interactive TV group, had a difficult session, falling a further 100p to 335p although there were indications of director-buying at 340p. Tunstall's profit warning removed a further 32p to 278p and Cardcast's admission it had yet to sign a deal with Credit Mutual, the French group, lowered the shares 7p to 73p. Eidos, the video technology group, slumped 62p to 683p on a near- pounds 2m loss.
Fayrewood, an audio equipment group, made an upbeat AIM debut, reaching 43p from a 36p placing.
Goldsborough, the healthcare group growing increasing confident of throwing off the hostile pounds 76m bid from Westminster Healthcare, which closes today, fell 14p to 148p with Westminster off 14p at 295p. First Choice, the holiday group, tumbled a further 10p to 54p.
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