Market Report: Spring Ram keeps falling in heavy trade

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THE DOWNWARD spiral of shares in Spring Ram, the Yorkshire-based bathrooms and kitchens company, continued yesterday, leading to some calls for an official investigation to discover whether the stock was being bear raided.

The Stock Exchange declined to comment on the situation, which has seen the share price tumble over the past couple of weeks from around 150p to 105p, down 10p yesterday. Spring's shares hit a high of 181p in May.

Trading in the stock was heavy yesterday with nearly 9 million turned over. The Birmingham- based broker Albert E Sharp handled an agency cross of 2.9 million shares at 105p.

Some analysts are perplexed by the behaviour of the shares. While they expect the company's pace of growth to slow, they are still looking for profits to rise by about 20 per cent to pounds 45m this year. Various rumours about the company's trading performance have been flowing thick and fast in recent weeks, but all have lacked foundation.

Spring said it could not comment on the recent events because the company had entered its close season.

However, some investors are wondering how long the company can hold on before it makes an official statement through the Stock Exchange denying any knowledge of reasons for the share price slump.

Panmure Gordon, the company's broker, which is believed to have found safe houses for the shares involved in the agency cross, was unavailable for comment.

Spring largely held centre stage with the Royal Bank of Scotland, which fell 21p to 153p on the disclosure of the pounds 418m writ from the liquidators of Wallace Smith Trust Company. Trading in Royal was chunky at 19 million.

Sentiment was also undermined by the bank issuing a profits warning along with its interim results. Smith New Court quickly slashed its profits estimate for 1992 from pounds 104m to pounds 57m.

National Westminster initially found favour with interim figures in the middle of expectations, but an early 6p advance was turned into a 4p fall to 320p on news that the bank was also caught up in the Wallace Trust issue.

Support continued for Barclays, up 8p to 225p, ahead of its results tomorrow. However, Standard Chartered, reporting today, eased 5p to 440p.

Outside the banking sector, the overall tone of the market was one of recession. The FT-SE 100 index gave up most of Monday's gains, closing 12.7 points off at 2,407.5.

Trading volume was more respectable at 467 million, although still adrift of the 500 million line at which the market makes money.

TI Group shed 31p to 283p on disappointing news on the likely profit performance of the recently acquired Dowty Group. Strauss Turnbull was said to be recommending that investors sell.

Talks in Madrid about the future of the European Fighter Aircraft unsettled British Aerospace, which fell 7p to 211p. UK government sources at the talks said the four nations involved in the project - Germany, Italy, Spain and the UK - were commissioning a feasibility study of a cheaper version of the fighter. The result of the study should be known in October.

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Building and construction stocks were unsettled by the latest statistics showing a 8 per cent decline in housing starts in the second quarter. Redland, the UK's largest maker of roof tiles, dropped 14p to 445p.

RMC Group, the concrete company, fell 11p to 479p and Rugby Group, the cement maker, declined 9p to 167p.

Also sucked into the downdraught were Heywood Williams, off 7p to 194p, Marley, down 7p to 78p, Pilkington, the glass maker, which lost 3p to 92p, and BPB Industries, the plasterboard maker, which dropped 7p to 150p.

Tension continued to surround the result of BET's pounds 200m rights issue, due to close today. The price eased 0.5p to the 110p rights price, prompting talk that the company would do well to attract a 50 per cent take-up for the new shares.

British Gas gave up another 2p to 234p with dealers saying the stock would probably remain unattractive until the Monopolies and Mergers Commission investigation into the industry had been completed.

WPP softened 2p to 45p ahead of today's meeting to vote on the company's refinancing plans.

Vodafone, the telecommunications group, bucked the trend, climbing 7p to 323p with several analysts pushing out buy recommendations.

Similarly, Dalgety rose 5p to 407p with Kleinwort Benson taking a liking to the stock.

Share prices failed to sustain advances made in early trading, drifting lower for most of the day to take the FT-SE 100 index uncomfortably close to the 2,400 benchmark. The index closed 12.7 off at 2,407.5, having been 14.6 points higher at one stage. The FT 30-share index lost 10.8 points to 1,804. Nearly 467 million shares were traded

Meyer International was weak, falling 14p to 277p as the company announced the withdrawal of its scrip dividend offer because its shares had fallen by more than 15 per cent in recent weeks. Bruce Wright, finance director, said the decision was an 'illustration of the way in which the share market has fallen'. The allotment price for the scrip shares was struck at 349.8p.

Shares in Waste Management went against the grain, rising 9p to 554p. County NatWest says that while the price has recently taken a battering there are encouraging signs that the industry leaders are trying to lift landfill prices. Success on that front would quickly feed through to profits. The broker's thoughts also spawned a 5p rise to 169p in Shanks & McEwan.