Market Report: Pru falls from favour as pounds 160m stake is sold

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The Independent Online
THE powerful Prudential Corporation, which often ruffles shares as it rearranges a portfolio that embraces most of Britain's top 350 companies, suffered the embarrassment of being the subject of a big share sale.

In what was believed to be a bought deal Smith New Court, acting for an unidentified institution, placed 46 million Pru shares for more than pounds 160m. As it sought buyers the price fell 9p to 362p.

SNC placed the shares at 354p. The stock market was not clear whether all the shares were housed but SNC, up 17p at 495p, described the exercise as a 'successful trade'. Speculation about the identity of the institution that is now out of step with the legendary man from the Pru was intense. The most popular guesses were Mercury Asset Management, the Britannic insurance group and HSBC, the banking giant.

Inadvertently, NatWest Securities eased SNC's path. Encouraged by the round of new business figures it helped life insurers by suggesting the sector would outperform this year. The NatWest cheer occurred after some other investment houses had made cautious noises. James Capel was thought to be one urging restraint.

But the insurance undertone has been firm for some time, largely because of the hovering presence of Union des Assurances de Paris, the state-owned French group, which has made no secret of its ambition to expand in Britain.

After Wednesday's heroics the market was in a more subdued mood, with the decision to leave German interest rates unchanged quelling, at least for the time being, hopes of lower domestic rates.

The FT-SE 100 index fell 28.8 points to 3,491.5. But the supporting FT-SE 250 index was firm, up 1.9 to a peak of 4,152.8. Volume again topped one billion shares.

British Aerospace's headlong flight came to an abrupt end, the shares easing 20p to 553p. Rolls- Royce's failure to win a Japanese Airlines order left the shares 5.5p down at 180p. BAT Industries, with UBS remaining bearish, fell 10.5p to 510.5p.

UBS also took the edge off J Sainsbury suggesting the shares, down 10p at 370p, were a sell.

Reed International was another weak spot. Reports that a Dutch publisher may face pressure because of claims of monopolistic tendencies sent the shares of the Anglo-Dutch group down 15p to 945p.

But Pearson rose 7p to 725p. A Cazenove buy recommendation, and the results from BSkyB were contributory influences.

Airtours, the holiday group, gained 6p to 570p. It is thought to be planning meetings with US institutional investors.

Euro Disney's sad decline continued as its problems mounted. The shares lost 35p to 375p. Savoy Hotel experienced another bout of bid fever, jumping 22p to 1,010p.

Scottish & Newcastle eased 6p to 573p as Kleinwort Benson registered sell advice and the group announced it was splashing out pounds 80m on a Center Parcs holiday village in Germany.

David S Smith, the packaging group, was busily traded, gaining 6p to 508p. Bunzl put on 10p to 170p. The two stocks were recommended in a packaging survey, thought to have been produced by Credit Lyonnais Laing.

McKechnie, the engineer, gained 15p to 534p as Barclays de Zoete Wedd forecast sharp earnings growth and lifted its recommendation to buy.

British Airways rose 7p to 491p as the latest traffic figures showed increased high-margin business.

Henderson Administration was the latest financial to attract attention. With rights issue fears apparently evaporating the shares jumped 73p to 1,193p.

Lonrho continued to benefit from the proposed flotation of its Ashanti Gold Fields offshoot, up 2p at 171.5p. The go-ahead for a Ghanaian gold development lifted Cluff Resources 10p to 50.5p.

Caffyns, the motor dealer, jumped 40p to 465p. Other motor dealers moving ahead included Sanderson Bramall, up 12p at 218p, and Quicks, 12p at 208p.

Newcomer Computerised Financial Systems, placed at 90p, reached 125p. Flextech, relisted on Wednesday following the United Artists deal, made further progress, up 30p to 453p.

Reject Shop, at one time down to 28p, ended 21p lower at 38p as Upton & Southern made an agreed bid below the market price. Upton rose 1p to 6p. Proteus, a computer-aided drugs designer, fell 31p (after 50p) to 394p as UBS abruptly resigned as one of the company's stockbrokers.

Fitch, the designer, admitted it was considering financial and management changes. The shares stuck at 15p.

GM Firth, the steel group, greeted a pounds 3.6m rights issue with a 5.5p gain to 28.5p. Creston was another welcoming a cash call, up 3p to 25p following a pounds 3m exercise to finance property acquisitions.

Excalibur, the engineer, held at 46.5p. Former managing director Richard Griffiths sold 800,000 shares at 45.5p. He still has 489,000.

The FT-SE 100 index fell 28.8 points to 3,491.5 but the FT-SE 250 index ended 1.9 higher at 4,152.8. Turnover was 1,096.3 million shares from 45,678 bargains. The account ends on 11 February with settlement on 21 February. Gilts fell by more than a point.

Fortune Oil, born out of the old Blackland Oil, is attracting attention. The shares have almost doubled to 7.75p since the company reappeared last summer. The market is intrigued by its close relationship with mainland China and the domination of the share register by Far Eastern interests. Deals are expected and the shares are seen as a play on China's growing world role.

Lambert Howarth, the Lancashire footwear importer and manufacturer, jumped 60p to 405p in a narrow market. Some feel year's figures, due in March, may not be quite as dismal as expected. There is talk the figure will be about pounds 1.5m against more gloomy forecasts of pounds 1.3m. For the following year the group should hit pounds 2.6m, still short of the pounds 3m achieved in 1992.

(Graph omitted)

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