Market Report: SIB sidelines insurers as festive spree continues

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The Independent Online
LIFE insurance firms were unhappy absentees from the latest stock market Christmas party.

As shares enjoyed another spectacular surge, the life sector wilted after a study for the Securities and Investments Board concluded that the quality of pension advice was even lower than suspected.

According to the report, it was possible that proper procedures were followed in only 9 per cent of switches from occupational to personal pension schemes.

The sector, already under the whip of SIB investigations, was by far the worst-performing corner of the market.

Legal & General tumbled 18p to 505p; Lloyds Abbey Life 19p to 412p; and Prudential Corporation 9p to 345p. Some of the composite insurance firms were also hit, with Commerical Union off 6p to 648p.

Since the SIB disquiet surfaced early last week, L&G has fallen 27p, LAL 37p and the Pru 15.5p.

The rest of the market was in ebullient form. In busy trading, the FT-SE 100 index soared 32.4 points to 3,311.2 and the supporting FT-SE 250 index reached its fifth consecutive high, up 42.6 to 3,674.1.

The latest example of the market's traditional festive cheer was achieved in busy trading with turnover hitting 923 million shares.

The inflation figures, continuing hopes of lower interest rates and the irrepressible influence of futures activity kept the cash market on the boil. But conditions were squeezed with today's expiry of the December option series likely to have made a considerable impact.

British Petroleum was again a significant feature, continuing to respond to this week's investment meetings.

At one time the shares were up 14p. They closed 9.5p higher at 342.5p with Seaq putting volume at 24 million.

Rank Organisation, emerging as one of the favourite blue chip tips for 1994, climbed 24p to 959p.

Utilities remained in demand, largely on yield considerations. Shares sensitive to interest rates were particularly strong. But the Kingfisher stores group was an exception. Worries about figures from Darty, its French offshoot, did the damage, lowering the shares 15p to 710p.

BPB Industries, the old British Plaster Board, improved 9p to 333p as Societe Generale Strauss Turnbull said buy. Analyst Simon Brown believes plaster board prices can be increased without damaging volume. He sees profits this year rising from pounds 57.5m to pounds 90m; climbing to pounds 115m next and then to pounds 150m.

Supermarket shares continued their hesitant recovery, with Tesco up 9.5p to 223p. Asda, reporting today, edged ahead 1p to 55p.

Most banks made headway although National Westminster felt the impact of a downgrading from rival Barclays de Zoete Wedd, which has lowered its expectations from pounds 1bn to pounds 950m and from pounds 1.53bn to pounds 1.4bn. The shares tumbled 16p to 581p.

Mirror Group Newspapers improved 3p to 162p as the US investment group FMR said it had acquired nearly 2.5 million shares, lifting its stake to 6.01 per cent.

Signet, ruffled lately by worries of poor trading, put on 1p to 18.5p. South Africans Julian Treger and Brian Myerson, who were deeply involved in the revised Greycoat property rescue, have lifted their preference stake in the former Ratners jewellery chain to 8.52 per cent.

Cookson, the industrial group, improved 6p to 224p. BZW is holding this year's forecast at pounds 8.5m but lowering next year's by pounds 5m to pounds 113m. It continues, however, to recommend the shares.

Arjo Wiggins Appleton fell 23p to 226p on the departure of director Gordon Bond; a profit warning clipped Harrisons & Crosfield, the chemical and timber group, 9p to 195p.

B Elliott, the machine tool group restructured last year, gained 3p to 69p as it said it would resume payments and pay off the arrears on its 3.15 per cent redeemable preference shares.

Manders, splashing out pounds 26.65m for some of Croda International's ink business, jumped 14p to 350p. The deal is seen as hastening the sale of its Manders shopping complex in Wolverhampton.

Essex Furniture rose 10p to 160p on the Jim Slater recommendation.

Rhino, the video games group, shaded 1p to 65p. Its rights issue enjoyed a 94.7 per cent take-up. The 1.6 million rump was placed by Panmure Gordon at 63p.

PG also placed 1.7 million shares of Oriflame International, the cosmetic group, at 332p; the shares fell 5p to 319p.

Nu-Swift Industries, the fire protection group, jumped 50p to 400p on the bid for full control from European Fire Protection.

Insurance broker Nelson Hunt, placed at 140p, closed at 143p.

Ennex International rose 2p to 12p. It has a gold deposit in Scotland and, with a Canadian partner, is seeking base metal in Ireland.

Another record performance: the FT-SE 100 index climbed 32.4 points to 3,311.2 and the FT-SE 250 index 42.6 to 3,674.1. Volume was 923 million shares from 32,467 deals. The account ends on 31 December. Government stocks were higher by up to half-a-point.

More than 23 per cent of Abbeycrest, the jewellery group, was placed at 72p by Panmure Gordon. Chris Dear, a director who retires next year, sold 5.4 million with most going to institutions, although other directors acquired 50,000. About 70 per cent of the capital is now held by the public. Profits are expected to emerge at pounds 1.75m against pounds 1.3m. The shares fell 4p to 79p.

Cementone, the building materials group, is today expected to obtain a listing via the reverse takeover of Multitrust, the shell chaired by Andrew Perloff. The group's biggest shareholder and deputy chairman is Vijay Mallya, the Indian entrepreneur who heads United Breweries. Roger Regan, chairman of Spring Ram, is also on the board. It could be valued at pounds 20m at launch.

(Graph omitted)

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