Market Report: Oil shares spurt on Opec production agreement

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The Independent Online
LEADING oil shares flared as details of the latest Opec production agreement became known.

British Petroleum jumped 8.5p to 324.5p; Enterprise 17p to 458p and Shell 5p to 670p.

It has been a remarkable account for oil shares as a leading US securities house turned bullish and some of the more intuitive investors banked on a realistic Opec settlement. BP has risen 29p; Shell 32p. The crude price has offered encouragement, making further progress yesterday.

The oil-exporting nations, which make up the body that once seemed to dominate the world economy, have settled on production of 24.52 million barrels a day. The new ceiling, which compares with 24.7 million barrels, will run until the end of next year.

But earlier Opec pacts have not held. And there is the possibility that yet another empty, unenforceable agreement is being paraded for world consumption.

The rest of the stock market, helped by window dressing as fund managers endeavoured to impress their trustees, turned in another solid display, with the FT-SE 100 index reaching 3,037.5, a 7.4 points gain. Worries about increased VAT were easily offset by lingering hopes that another interest rate cut is likely soon.

Rolls-Royce, the aero engine group, ended just 0.5p higher at 149.5p as, following its rights issue, it called upon the Government to lift its foreign shareholding ceiling to 49 per cent.

Already this year Rolls has suffered the embarrassment of overseas shareholdings breaking through the present 29.5 per cent limit. Since it was privatised Rolls has on a number of occasions been forced to insist that foreign shareholdings that have broken through the limit should be reduced.

When Rolls was floated the limit was imposed at 15 per cent. It has since been raised to 29.5 per cent. British Aerospace is another privatised group with a 29.5 per cent ceiling.

British Steel's restoration continued with the shares at one time reaching 130p. James Capel appeared to be giving the shares a push. The price ended at 128.5p, up 4p. The flotation was at 125p.

Another privatised group, British Airways, had a difficult session, falling 7p to 358.5p. Its USAir associate did the damage. The American airline forecast a dollars 180m third-quarter loss and said it would make a loss for the year. It has embarked on a cost-cutting exercise.

BA has just under 25 per cent of the US airline; it is one of a number of stakes it has acquired in overseas groups to increase its international network. Westland, the helicopter group, dropped 9p to 230p as NatWest Securities downgraded.

The Bass investment presentation produced a relatively modest 3p fall to 457p. Highland Distilleries slipped 5p to 333p as, following the North British Distillery deal, Orpar, the Remy Martin/Cointreau holding company, increased its stake to 10 per cent through Cazenove and Parsons Penney.

Owners Abroad dipped 4p to 79p. There have been some big deals in the shares with rumours pointing to a sale by Gartmore, the investment group that backed Owners against the Airtours bid. It is suggested that most of the Gartmore shares have ended up with P&D fund management, another that rejected the offer.

If it has acquired Gartmore shares P&D's stake could have gone above 20 per cent, second only to Thomas Cook, the German-controlled group, which has 21.35 per cent.

The Airtours offer touched 150p a share. The intervention of Thomas Cook played a leading part in Owners surviving the onslaught.

Inchcape, the international trader, fell 12p to 515p. Robert Fleming Securities, it seemed, made negative noises. Another securities house downgraded.

Smith New Court, the investment group, was busily traded with a large line going through. The shares ended 10p higher at 334p.

Aberdeen Trust, an investment group, edged ahead 1.5p to 59.5p.

Cautious remarks by Forte, the hotelier, left the shares 10p lower at 227p; Ladbroke, taking in the Hilton chain, fell 6.5p to 185.4p in sympathy.

Betterware, the door-to-door selling group that has been weak recently, firmed to 208p. Barclays de Zoete Wedd rate the shares a buy.

Sales have improved after a 'testing first quarter when the average order value came under pressure'. First-half orders are above budget. BZW expects year's profits of pounds 17.5m, climbing to pounds 22m.

Ticketing, the First Call and Keith Prowse ticket agency, held at 2.25p. Director Clive Ng, a Malaysian television entrepreneur, has sold 40 million shares. He still has 53 million shares (6.3 per cent).

The FT-SE 100 index rose 7.4 points to 3,037.5 but the second- line FT-SE 250 index fell 1.2 to 3,433.2. Turnover was 694.8 million shares with 30,358 bargains. The account ends today and settlement is on 11 October. Government stocks were firm.

Enterprise Computers has had an eventful time, but some detect encouraging signs. The group's bankers are offering support. An intriguing deal has been clinched with Granada and the sale of an offshoot, which could pull in pounds 5m, seems to be near completion. After previous losses, profits of perhaps pounds 3m are possible this year. The shares are 32.5p.

Hichens Harrison has quit as stockbroker to GM Firth, the steel group. The reason for the split is unknown. Hichens directed inquiries to Firth, which referred them to the broker. Firth, a loss maker, is headed by Michael Wilkinson who moved in two years ago. He has attempted to reshape the group largely through disposals. The shares held at 12.5p.