Yesterday the price brushed its 1993 high with the group's announcement of the dollars 600m engines order from Continental Airlines of the US. Rolls engines will power Continental's Boeing 757 aircraft.
The shares, in often brisk trading, rose 5p to 138.5p compared with the 99p touched earlier this year when a pounds 184m loss and wide-ranging redundancies were announced.
Even so Rolls, which went to a 233p peak in 1990, is still rivalling British Steel as the worst-performing privatisation issue.
Its shares were offered for sale, in two stages, in 1987 at 170p. Only British Steel, sold at 125p and now 96p after a low of 54p, has managed such an unrewarding display.
The dramatic revamping that accompanied the loss has impressed the stock market. As one securities house observed: 'Rolls grasped the nettle and cut the dividend and provided for a major restructuring programme'.
Since the figures, the group has clinched a number of contracts, but the Continental deal is seen as the most significant it has achieved this year.
Rolls has, during its quoted life since 1987, always had to contend with the long City memory that recalls the disasters which overwhelmed the group in the late 1960s. But the analytical view is that Rolls will achieve profits of approaching pounds 100m this year with pounds 150m in sight for next year.
As Rolls climbed, another privatisation issue that has had its problems, British Aerospace, held at 325p as NatWest Securities joined the growing ranks of supporters.
BAe, down to 125p last year, held at 325p. The group, under new chairman John Cahill, has seemingly enjoyed a spectacular recovery. NatWest has upgraded this year's forecast from pounds 60m to pounds 100m, expects pounds 195m next year and has set its sights on pounds 310m for the following year. A price of around 500p is its target.
The rest of the stock market was in ebullient form with the FT-SE 100 share index improving 24.7 points to 2,860.8. The FT-SE 250 index, measuring the shares immediately outside the top 100, rose by 13.7 to 3,145, less than 10 points from the peak reached in March. The surprise German decision to lower interest rates, which prompted cuts by other European countries, was the main influence.
The feeling persists that lower Continental rates offer an enticing opportunity for the Government to reduce UK interest levels, and there is a growing conviction a cut will materialise soon.
The arrival of Zeneca, albeit via unofficial dealings, was the highlight of the session. Imperial Chemical Industries in its demerged version ended at 609p with Zeneca nil-paid at 86p. ICI, still enjoying official trading, rose 21.5p to 1,284.5p.
Zeneca will, when official dealings start on 1 June, become an FT-SE 100 constituent, probably replacing WH Smith.
British Airways, results next week, held at 296p. There is a nagging suspicion a rights issue will accompany the figures. Most observers believe BA is destined to tap shareholders. The question is whether it delays the call in the expectation trading conditions will improve.
The 1992 figures are likely to emerge at about pounds 195m, down from pounds 258m. But this year's profit is provisionally forecast at pounds 290m.
Rank Organisation, ahead of today's analysts' meeting, dipped 14p to 694p with some chunky lines of stock on offer.
BAT Industries edged forward 7p to 886p and Rothmans International 'B' gained 13p to 661p. More developments in the US tobacco 'price war' were responsible for the modest strength. It seems Philip Morris, which hit the shares of the UK tobacco groups when it cut the price of its top-selling Marlboro brand, has lifted prices of its cheaper lines, which is seen as taking some of the pressure off BAT's US offshoot, Brown & Williamson.
TI Group, up 12p to 337p, was helped by an encouraging statement and a buy recommendation from Panmure Gordon. Simon Engineering, on warnings of a half-year trading loss and increasing debt, slumped 26.5p to 73.5p.
Cray Electronics put on 5p to 151p, with NatWest increasing its forecasts from pounds 16.4m to pounds 17m and from pounds 25m to pounds 25.5m.
Norex rose 12p to 165p as its long- suspected deal with insurance broker Lowndes Lambert duly materialised. LL, little changed at 347p, is paying pounds 8m for Norex's financial and insurance operations. A share placing at 335p by Kleinwort Benson helped to finance the deal.
The strength of the Hong Kong market helped HSBC, up 19p to 606p, and Cable & Wireless, 18p higher at 719p.
Abbeycrest, the jewellery maker, climbed 3p to 78p, helped by the more positive feeling surrounding Ratners, unchanged at 35p, and the firmer gold price.
Raglan, the property group, rose 0.75p to 3p in heavy trading. A capital revamp prompted the board to advise in March that the shares were overpriced at 1p. National Home Loans, up 1.5p to 11.5p, enjoyed support on the signs of a revival in the housing market.
The FT-SE 100 index rose 24.7 points to 2,860.8 and the FT-SE 250 index 13.7 to 3,145. Trading was often brisk with turnover reaching 773.6 million shares and 28,388 bargains recorded. The account ends on 21 May with settlement on 1 June. Gilts staged a late rally.
BM Group, the once high-flying construction equipment business, now battling to reinvigorate itself, is on the verge of selling its US distribution network. The division is substantial and could alleviate BM's significant debt burden. The group has also successfully renegotiated bank facilities. The shares, more than 400p in late 1991, slipped 0.5p to 24.5p. They have rallied from 16p in the past three weeks.
Oliver Resources, the little Irish oil and gas explorer traded on the USM, is due in effect to complete its reverse pounds 22m takeover of Kirkland today. The new group, set to step up for a full listing, will rejoice in the name Dragon Oil. It will raise pounds 4m through a one-for-seven open offer at 2.25p. Kirkland is a Far Eastern resources group with an Oslo share listing. Oliver shares held at 2.25p.
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