The stock market took such old-fashioned advice seriously enough yesterday to fall back on two long-running takeover candidates - Fisons and Royal Insurance.
Both shares have been much higher and should be responsive to well-placed, convincing yarns. Fisons hit 515p last year, Royal 491p. And, with trading often down to the merest trickle, the rumour-mongers had a fertile environment. Even so, their success was very modest.
Fisons, in brisk opening trading, jumped 12p to 180p. But interest quickly faded and the shares ended 5p higher at 173p. Royal turned in a more sedate performance as turnover remained quiet. The price rose 7p to 151p.
Imperial Chemical Industries was said to be preparing to pounce on the drugs and scientific instruments group. It wanted Fisons to strengthen its drugs operation ahead of its own demerger next year.
Helping the story along was ICI's cancellation of investment meetings with powerful Scottish fund managers. But according to ICI the meetings were postponed until the year-end when the group, still enjoying its success in shrugging off the unwanted attentions of Hanson, would have more to say about its demerger intentions.
Fisons also drew strength from suggestions that its Opticrom eye treatment, a key part of its drug portfolio, was about to be reinstated in the US. Fisons refused to comment. Said one dealer: 'If Opticrom had received US clearance the company would rush to tell us.'
The group is due to announce interim figures next week. They are expected to be about pounds 45m against pounds 95.2m.
Royal, which has split its operations in two although it is not attempting a full demerger, is regarded as vulnerable to a strike. A French-German alliance was said to be hovering.
Like Fisons, Royal is in a weak position to resist a takeover. Hit by its mortgage indemnity business, it is expected to report a pounds 150m loss this year, down from pounds 373m.
The rest of the market had one of the quietest sessions of the year. But for a late programme trade it would undoubtedly have recorded the lowest turnover this year. Even with the programme trade - was it Barclays de Zoete Wedd, County NatWest or UBS Phillips & Drew? - volume struggled to a mere 312.9 million shares.
The dollars 2 pound continued to erode international stocks and the rest of the market fretted about the possibility of higher interest rates. With the Bundesbank due to meet tomorrow and continuing uncertainty over the French referendum, the FT-SE share index ended 14.2 points lower at 2,298.4.
The downgrading business was again in full swing. Rank Organisation was lowered 14p to 490p as Kleinwort Benson reduced this year's forecast from pounds 245m to pounds 228m and next from pounds 321m to pounds 287m.
It points out that the price war in the package holiday industry, which sent Airtours tumbling 13p to 173p and Owners Abroad 4.5p to 56p, could damage late bookings at Rank's holiday centres.
The chemical group Courtaulds fell 17p to 412p. James Capel axed forecasts from pounds 215m to pounds 200m and pounds 235m to pounds 220m.
Tate & Lyle firmed 0.5p to 294p as County put the shares back on its buy list. But BZW weighed in with a modest profit downgrading and analyst Julian Hardwick said: 'It is not the right time to buy the shares.'
British Gas fell 3.5p to 238p, with S G Warburg negative, and business services group BET was hit by UBS, down 10p to 104p. Lucas Industries was again weak, down 5p to 78p.
Building shares suffered another demolition job following the Persimmon profits slump. Barratt Developments tumbled 8p to 41p and George Wimpey 12p to 85p. Persimmon lost 25p to 148p.
But banks enjoyed a little early support on signals that 'free' banking will end. National Westminster, with the added comfort that it had overstated its problem debts by pounds 300m, gained 7p to 301p. Merchant bank Henry Ansbacher rose 2p as South African First National Bank was revealed as the possible bidder.
Utilities failed to offer any comfort. Electricities fell. The package is unbundled on Friday. Waters were hit by suggestions of new curbs by Ofwat.
British Aerospace edged 7p higher to 205p on revived hopes of Saudi Arabian orders, and TVS Entertainment continued to benefit from US interest - up 1.25p at 17.25p.
The end of bid action left T Cowie 5p up at 126p and Henlys 5p lower at 62p.
The FT-SE share index ended 14.2 points down at 2,298.4. It moved between an early 0.7 gain and a lunchtime fall of 16.1. The FT 30-share index lost 10.6 points to 1,670. Trading was again thin. Volume was a mere 312.9 million shares with only 15,688 bargains closed. Government stocks were little changed.
Shares of Malaya Group, a loss-making Sussex garage owner, stuck at 17p yesterday. New Zealander Colin Giltrap has sold 1 million shares and now has 27.26 per cent. In two deals he paid 47p and 24p for control, which is now going to Lancaster Associates, run by Nick Lancaster, following a cash injection. Malaya lost more than pounds 1m in the three years to last year.
Regalian Properties rose 0.5p yesterday to 3p, making a two-day gain of 1p. Provident Mutual, one of the struggling company's biggest institutional shareholders, has cut its stake. It has sold nearly 1.7 million shares, reducing its interest to 9.99 per cent. On Friday a trade of 9.6 million shares at only 0.75p a share went through. The price was 100p last year.
(Graph omitted)Reuse content