Market Report: Share split heralds a new slimline Reuters

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The Independent Online
ON MONDAY the stock market will have to become familiar with a slimline Reuters.

The long-standing heavyweight constituent of the FT-SE 100 index will take on a much more streamlined appearance when its shares, up 24p at 1,980p, are split into four.

Already influential forces are jockeying for position and there is talk of market-makers being short of stock.

The Reuters split comes almost a decade after the shares were launched on the stock market at 196p.

Their new dawn will herald the introduction of quarterly reports. The first will be on Monday, 25 April, when Reuters hosts a big investment presentation in Geneva.

Peter Job, chief executive, had planned to meet analysts earlier this month when he was due to address the powerful Society of Investment Analysts. But illness forced him to cry off.

Stockbrokers Henderson Crosthwaite remain keen buyers of the shares which have, with the market, drifted from their peak. Analyst Brian Newman believes profits this year will surge pounds 80m to pounds 520m, with pounds 600m likely next year.

He points out that the international information group is scoring on many fronts and chairman Sir Christopher Hogg was bullish at the yearly shareholders' meeting.

The London four-for-one share split and the consequent two-for- one in the US will, he believes, have 'a positive influence on the share price'.

The rest of the stock market failed to cling to early gains and by the close the FT-SE 100 index was down 13.3 points at 3,145.8, with a dull New York performance again taking its toll.

A weak display by government stocks was another inhibiting influence. They fell by up to half a point, unsettled by a nervous German bond market which was tortured by the deepening problems at the huge German property empire Jurgen Schneider.

Even lingering hopes of an interest rate cut failed to inspire much activity. The Bundesbank meets today, and once again there is speculation that the Germans will announce their long overdue reduction.

Insurance broker Sedgwick was the most actively traded share as Transamerica, the US group which recently paid pounds 757m for Tiphook's container leasing side, sold its 114.5 million shareholding.

In a bought deal Morgan Stanley is thought to have paid 191p for the shares, placed at 193p. It enlisted the placing muscle of S G Warburg, which had joined it in a placing of 59 million Sedgwick shares held by Transamerica three years ago.

The sale of the remaining 22 per cent interest came as no surprise as Transamerica had let it be known it planned to exit from the insurance and property industries.

Sedgwick shares, which have been under the shadow of the possible Transamerica sale for some months, fell 15p to 198p.

There was some intriguing dealing in Scottish & Newcastle, the brewing and holiday centres group. The shares were at one time 7p higher at 546p as a determined buyer sought stock.

They closed at 543p, although it is thought the buying order was not satisfied.

Lasmo was little changed at 128p as its signalled rights issue - a call for pounds 219m - duly materialised. Burmah Castrol, helped along by Panmure Gordon support, improved 8p to 838p. The group has an ambitious presentation scheduled for next month

British Aerospace dipped 2p to 480p as it disclosed overseas shareholdings had again hit the 29.5 per cent ceiling. The fear is that with many registrations still in the pipeline foreign holdings have already exceeded the restriction and another round of forced selling will take place.

Insurance shares were ruffled by a US report suggesting pollution and asbestos claims represented a 'black hole' for the industry, possibly requiring additional reserves of pounds 180bn.

Chloride, once famous as a battery maker but now more involved in electronics, was briskly traded, gaining 2.25p to 35.25p. The shares have been remarkably strong since the Swedish SSA & Partners sold its 20 per cent shareholding though Smith New Court in February.

There was talk of stake-building and buying ahead of a bid. Some, however, wondered if overseas disposals were imminent.

Lep Group, the freight forwarder, slumped 2p to 4p following the disclosure of its legal battle with former chairman John Read. The company said it was 'vigorously defending' the Read action.

Sims Food Group issued a profit warning - an exercise it has accomplished in the past. The shares fell 21p to 82p, a distant cry from the 328p hit in 1991.

Pizza Express held at 123p. Peter Boizot, chairman, has sold 2 million shares at 120p through Greig Middleton and Credit Lyonnais Laing. He is left with 10.8 per cent.

Avesco, the broadcast equipment group, jumped 10p to 99p. The excitement was caused by news that investment presentations are due to be held by S G Warburg. They will almost certainly provide details of its VideoLogic offshoot, expected to be floated soon. VL has a computer chip which can process information for the heavily hyped multi-media revolution.

Takare, the nursing homes group, was unmoved at 258p, as Dev Pritchard, ousted as managing director last month, sold 12.5 million shares, most of his stake. The shares were placed by Credit Lyonnais Laing. The price was thought to be near 250p. A sale by Mr Pritchard, one of the group's founders, had been expected and the removal of the overhang could lift the shares.

The FT-SE 100 index fell 13.3 to 3,145.8 and the FT-SE 250 index 7.1 to 3,801.2. Turnover, swollen by the Sedgwick placing, was 885.7 million shares with only 25,072 bargains recorded. The account ends on 22 April with settlement on 3 May.

(Graph omitted)

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