Market report: Overseas investors create turbulence for Rolls- Royce

Rolls-Royce hit more turbulence following its disclosure that overseas investors had increased their shareholdings to 29.2 per cent. The shares, already casualties of sterling's strength, fell 3.5p to 220p, lowest since last summer.

The aero-engine group and British Aerospace have to keep their foreign shareholdings below 29.5 per cent. The companies and various other interested parties are struggling to have the limit abolished.

In the past, when shareholdings have exceeded the ceiling there has been enforced selling of foreign-owned shares. Such action has caused widespread discontent as overseas investors invariably suffered losses.

The restriction on overseas interests has existed since BAe and Rolls were privatised. At one time it was as low as 15 per cent but after intense lobbying was lifted to the present level.

The Government imposed the ceiling to ensure the two groups remain under British control. In addition to restricting overseas shareholdings the Government exerts further influence through a "golden share" at the two groups.

The pound's performance and worries about possible compensation had already pulled Rolls back from its 267.5p peak. The shares could go even lower if the foreign ceiling is breached and overseas investors are once again forced to dump shares. Such a development will again sour investor relations.

BAe, where foreign shareholdings stand at a less threatening 26.52 per cent, rose 2.5p to 1,250p.

The stock market had a surprisingly active session considering New York was closed. Footsie recouped most of its early 21.9-point fall, ending 3.2 off at 4,337.8.

Lloyds TSB kept the banking sector on its toes. After meeting analysts its shares rose 15p to 518.5p.

However, Barclays, figures today, fell 16.5p to 1,199.5p. Reports of a second-half set-back at its BZW securities arm did much of the damage. A rumour Barclays planned to buy a stake in Banque Nationale de Paris, possibly announcing the acquisition today, also unsettled the shares.

Unilever was - again - the best-performing blue chip, up 67p to a 1,604.5p peak. After last week's positive performance by the UK side there was sudden interest in the Netherlands when Morris Tabaksblat, head of the Dutch end of the detergent and food giant, said cash would be handed to shareholders if suitable acquisitions were not found.

Unilever intends to sell its speciality chemical side and hit the takeover trail. Reckitt & Colman, little changed at 766.5p, and Smith & Nephew, off 7.5p at 188.5p, are regarded as the most likely UK targets. Another name in the frame is US group Colgate Palmolive.

British Gas disappeared, leaving its army of Sids with holdings in BG and Centrica. With Merrill Lynch putting a 40p target price on Centrica the shares slumped 10.25p to 65.25p; Seaq putting volume at a remarkable 54.51 million. Last week, in their when-issued form, the shares were in demand on takeover hopes. The other half, BG, rose 2.5p to 174.5p with turnover put at 19.76 million.

Today, grey market dealings are due to start in Hanson and Energy Group in a when- issued form. Official dealings commence on Monday.

Hanson fell 1.75p to 90.5p. Yamaichi says Energy shares are a buy up to 610p.

Expected stockbroker circulars had contrasting impacts. Henderson Crosthwaite is preparing a buy recommendation on Racal Electronics, up 3p to 289p, and Greig Middleton is thought to have adopted a bearish stance on Scotia, the pharmaceutical group, lowering the shares 29.5p to 679.5p.

Railtrack, ahead of this week's investment presentation, gained 10.5p to 393.5p.

Securicor gained 8p to 311.5p on stories BT was once again seeking Whitehall clearance to take full control of the Cellnet mobile telephone business. BT has 60 per cent with Securicor accounting for the rest. The Securicor interest is estimated to be worth up to pounds 1.6bn.

Enterprise Oil spurted 11p to 648.5p as more analysts made positive noises and the group moved towards developing its big Italian oil field.

After Friday's sharp fall, which prompted its dramatic exclusion from Footsie, Williams Holdings ended 1.5p down at 299p after 294.5p. Target Chubb Security fell 3p to 421.5p despite talk of a counter-bid.

Gowrings, the garage and fast food group, jumped 10p to 108.5p. There was talk of investment meetings. Last year Guinness Peat signalled a 90p- a-share offer but backed away when Gowrings resisted.

PROMOTED VIDEO
News
A 1930 image of the Karl Albrecht Spiritousen and Lebensmittel shop, Essen. The shop was opened by Karl and Theo Albrecht’s mother; the brothers later founded Aldi
people
News
Lane Del Rey performing on the Pyramid Stage at Glastonbury 2014
people... but none of them helped me get a record deal, insists Lana Del Rey
Life and Style
fashion Designs are part of feminist art project by a British student
Arts and Entertainment
Dwayne 'The Rock' Johnson stars in Hercules
filmReview: The Rock is a muscular Davy Crockett in this preposterous film, says Geoffrey Macnab
News
i100
Arts and Entertainment
British author Howard Jacobson has been long-listed for the Man Booker Prize
books
News
ebookA unique anthology of reporting and analysis of a crucial period of history
Life and Style
tech
Arts and Entertainment
Standing the test of time: Michael J Fox and Christopher Lloyd in 'Back to the Future'
filmA cult movie event aims to immerse audiences of 80,000 in ‘Back to the Future’. But has it lost its magic?
Sport
Louis van Gaal watches over Nani
transfers
Arts and Entertainment
Flora Spencer-Longhurst as Lavinia, William Houston as Titus Andronicus and Dyfan Dwyfor as Lucius
theatreThe Shakespeare play that proved too much for more than 100 people
News
exclusivePunk icon Viv Albertine on Sid Vicious, complacent white men, and why free love led to rape
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

Cost Reporting-MI Packs-Edinburgh-Bank-£350/day

£300 - £350 per day + competitive: Orgtel: Cost Reporting Manager - MI Packs -...

Insight Analyst – Permanent – Up to £40k – North London

£35000 - £40000 Per Annum plus 23 days holiday and pension scheme: Clearwater ...

Test Lead - London - Investment Banking

£475 - £525 per day: Orgtel: Test Lead, London, Investment Banking, Technical ...

Business Analyst - Banking - Scotland - £380-£480

£380 - £480 per day: Orgtel: Business Analyst - Banking - Edinburgh - £380 - ...

Day In a Page

Noel Fielding's 'Luxury Comedy': A land of the outright bizarre

Noel Fielding's 'Luxury Comedy'

A land of the outright bizarre
What are the worst 'Word Crimes'?

What are the worst 'Word Crimes'?

‘Weird Al’ Yankovic's latest video is an ode to good grammar. But what do The Independent’s experts think he’s missed out?
Can Secret Cinema sell 80,000 'Back to the Future' tickets?

The worst kept secret in cinema

A cult movie event aims to immerse audiences of 80,000 in ‘Back to the Future’. But has it lost its magic?
Facebook: The new hatched, matched and dispatched

The new hatched, matched and dispatched

Family events used to be marked in the personal columns. But now Facebook has usurped the ‘Births, Deaths and Marriages’ announcements
Why do we have blood types?

Are you my type?

All of us have one but probably never wondered why. Yet even now, a century after blood types were discovered, it’s a matter of debate what they’re for
Honesty box hotels: You decide how much you pay

Honesty box hotels

Five hotels in Paris now allow guests to pay only what they think their stay was worth. It seems fraught with financial risk, but the honesty policy has its benefit
Commonwealth Games 2014: Why weight of pressure rests easy on Michael Jamieson’s shoulders

Michael Jamieson: Why weight of pressure rests easy on his shoulders

The Scottish swimmer is ready for ‘the biggest race of my life’ at the Commonwealth Games
Some are reformed drug addicts. Some are single mums. All are on benefits. But now these so-called 'scroungers’ are fighting back

The 'scroungers’ fight back

The welfare claimants battling to alter stereotypes
Amazing video shows Nasa 'flame extinguishment experiment' in action

Fireballs in space

Amazing video shows Nasa's 'flame extinguishment experiment' in action
A Bible for billionaires

A Bible for billionaires

Find out why America's richest men are reading John Brookes
Paranoid parenting is on the rise - and our children are suffering because of it

Paranoid parenting is on the rise

And our children are suffering because of it
For sale: Island where the Magna Carta was sealed

Magna Carta Island goes on sale

Yours for a cool £4m
Phone hacking scandal special report: The slide into crime at the 'News of the World'

The hacker's tale: the slide into crime at the 'News of the World'

Glenn Mulcaire was jailed for six months for intercepting phone messages. James Hanning tells his story in a new book. This is an extract
We flinch, but there are degrees of paedophilia

We flinch, but there are degrees of paedophilia

Child abusers are not all the same, yet the idea of treating them differently in relation to the severity of their crimes has somehow become controversial
The truth about conspiracy theories is that some require considering

The truth about conspiracy theories is that some require considering

For instance, did Isis kill the Israeli teenagers to trigger a war, asks Patrick Cockburn