Market Report: Summer season starts at Burton

A LATE flurry of activity in Burton Group shares bolstered yesterday's trading, which sported all the classic characteristics of the start of the quiet summer holiday season.

Some 67 million shares in Burton, owner of the Dorothy Perkins, Debenhams and Principles retailing chains, were traded. They represented nearly 14 per cent of the day's total business of 484 million.

Most of the dealing in Burton was understood to have been accounted for by a single seller of 20 million shares, which were rehoused with one institution through Cazenove, the company's broker, at 74p each.

Burton closed a shade higher than that price at 74.5p, up 3.5p on the day.

Boots was another stores group to stand out, rising 10p to 442p after an investment presentation by SG Warburg and hopes that the company would soon announce the sale of its prescription drug business.

Turnover in Boots was also healthy, with 8.5 million shares traded.

The same, however, could not be said for most of the other 99 Footsie stocks, in which only 156 million shares were dealt.

Reuters claimed 6.4 million of that total on its pounds 350m share buy-back plans, and ahead of today's interim results.

The share price, though, lost a large slice of an early 51p gain as US investors digested the news in the afternoon, and closed 36p better at pounds 14.40.

Overall, the market was underpinned in the morning session by Friday's 21-point gain on Wall Street, and strong beliefs that Germany will cut interest rates on Thursday.

And a further advance in early trading on Wall Street yesterday pumped some life back into the market, enabling the FT-SE 100 index to close 16.5 points higher at 2,844.2.

Gilts closed off their highs, up just over 1 16 at the short end and 1 4 at the long.

United Biscuits was one stock to be influenced by America, gaining 7.5p to 366p towards the close on a revival of takeover speculation on Wall Street. Cadbury Schweppes, long tipped as the most likely predator, advanced 10p to 452p.

SmithKline Beecham was in demand by US investors, closing up 13p at 448p with 5p of that advance occurring in the last few minutes.

Shares in the building materials groups Redland and RMC Group, both with a large exposure to the German market, gained on the hopes of lower rates.

Redland, up 7p at one time, finished 4p firmer at 481p, while RMC closed at 781p, up 5p, having earlier touched a year's high of 784p.

'The perception is that they would stand to gain from lower-cost money in the German market if Germany cut interest rates to help the franc,' one analyst said.

Life insurance companies, hit last week by the decision to force them to disclose commissions and other benefits, had another bad day. The damage this time was caused by a report in yesterday's Independent of possible changes to the tax treatment of endowment policies.

Legal & General retreated 6p to 464p, Prudential lost 4.5p to 305p, Refuge shed 7p to 943p and Lloyds Abbey Life eased 3p to 409p.

Lloyds Abbey is due to report interim results tomorrow. Analysts, who generally believe that shares in the life companies will remain in the doldrums for some time yet, expect profits from Lloyds Abbey of about pounds 155m, up from pounds 142m last time.

Banks enjoyed a steady day before the start of their half-year results season, which will kick off on Friday when Lloyds Bank reports.

Barclays rose 6p to 474p, National Westminster put on 8p to 489p as recent rights issue fears subsided, and Lloyds advanced 9p to 567p. TSB lost 0.5p to 194p despite the pounds 183m disposal of its Swan National business to Forward Trust, the subsidiary of HSBC, which rose 8p to 634p.

In motor components, GKN was unsettled by more downgradings - this time by Hoare Govett and Nomura.

However, GKN shares recovered some ground towards the close to 465p, down 8p, but above the day's low of 462p. There is some feeling among investors that previous recovery expectations were over-optimistic.

Elsewhere, Great Portland Estates gave up 4p to 191p as Cazenove placed the 4.8 million rump of its rights issue and 5 million shares from existing holders at 189p.

Company results commanded some attention. Disappointing figures from Merrydown Cider were greeted with a 16p fall to 268p, while Union Discount's recovery at the half-year was marked by a 7p gain to 159p.

Water utilities were generally a few pence better before the release of a quality report by Ofwat, the industry's watchdog. Anglian, however, went against the grain and dipped 2p to 471p on its pounds 72.5m sterling issue.

On the Unlisted Securities Market, a confident annual meeting statement on prospects helped Allen 2p higher to 115p. Shareholders were told that house reservations in April, May and June were 36 per cent higher than in the previous year.

Shares made a firm start to the second leg of the account, although actual investment activity was low. The FT-SE 100 share index closed at 2,844.2, up 16.5 points. A 12.3-point rise to 3,215.2 was recorded in the FT-SE 250. Account ends on 30 July and settlement is 9 August.

The normally tight market in Feedback, the USM-quoted maker of high-technology equipment, was enlivened by the sale of 722,500 shares by a single investor. The shares, some 8.5 per cent of the issued equity, were placed with institutions through Shaw & Co. Feedback, 60 per cent owned by the directors and which recently reported a further recovery in profits, closed 6p higher at 89p.

Eastern promise could give a fillip to Wilshaw, the small special metals company. There is talk that the Chinese government is interested in a tie-up involving Wilshaw's powdered metallurgy division. Scrap metals are turned into powder, which is then treated and used to fortify other metals. Beeson Gregory has upgraded its current year profits forecast to pounds 2.8m. The shares stand at 33p.

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