Market Report: Surprise advance gets account off to good start

Click to follow
SHARES managed to achieve one of those rare performances that astonish even the stock market.

With the uproar in Moscow, a weak New York and the latest Whitehall statistics offering no encouragement for an interest rate cut, many traders expected at best a lacklustre display.

But the new account got off to a rip-roaring start with the FT-SE 100 index up 28.4 points at 3,067.7, highest for more than a month and seemingly set to challenge its old peak.

Once again the futures market made a significant contribution to the activity. Threre were even suggestions that, in a convoluted way, the futures activity stemmed from the summertime upsurge in unit trust buying.

Trading was not heavy. A few portfolio trades and some selective buying were weighed against a pronounced reluctance to sell.

Utilities had a good day, particularly waters. SG Warburg moved from neutral to overweight, drawing attention to the sector's safe dividend yields. The Warburg move followed a rather less enthusiastic approach from NatWest Securities on Friday.

With North West Water's Mexican contract adding to the excitement there were gains throughout the list. NWW rose 10p to 521p, Thames 11p to 547p.

Electricity shares were also bright with dividend considerations the main influence. Yorkshire, the worst-performing electricity share in the last quarter, attracted attention, gaining 7p to 590p.

Hanson put on 6.5p to 260p with changes at the newly acquired Quantum Chemical Group helping sentiment. But worries persist about the long- running Peabody coal strike in the US and downgradings are still taking place.

Barclays de Zoete Wedd turned a little more positive on the battered food retailers, provoking a modest recovery.

The old takeover favourite Lucas Industries, figures next week, was busily traded. Seaq put turnover at 2.4 million. The price rose 7p to 156p.

Cadbury Schweppes held at 454p as some fretted about its involvement in the Camelot consortium seeking the national lottery franchise. Its rights issue attracted a 93.3 per cent take-up. Hoare Govett placed the 5.5 million rump at 450p.

Imperial Chemical Industries held at 716p. Hoare, until recently one of ICI's stockbrokers, moved its recommendation from hold to overvalued.

The shares, the analyst Martin Evans believes, are expensive with little upside. But he has increased his profit expectations by pounds 30m to pounds 280m for this year and by pounds 60m to pounds 410m for next.

Ladbroke, ex its 4.92p dividend, tumbled 10p to 178p on last week's alleged rumours of banking problems. Invergordon Distillers enjoyed a brief flurry on weekend stories that American Brands was seeking support to launch another takeover strike.

The US group has a 41.3 per cent interest, a legacy of its unsuccessful assault two years ago. Invergordon shares touched the previous 275p bid price before relapsing to 268p, up 2p.

BTR, up 4.5p at 376.5p, attracted attention with Seaq putting volume at 14 million and lumpy lines going through. Salomon Brothers appeared to handle much of the business.

There was interest in the financials. Standard Chartered's Indian settlement put the shares up a further 16p to 284p. Expectations that profits forecasts for Warburg will be lifted sent the shares 18p higher at 815p and Smith New Court, on last week's share take-up by directors and staff, rose 20p to 361p.

The insurance broker Steel Burrill Jones, under pressure lately following poor results, rose 9p to 148p. Directors picked up 125,000 shares. London Scottish Bank fell 10p to 89p as takeover talks were abandoned.

BAA, on its proposed Chinese airports expansion, gained 14p to 869p. Amstrad, figures today, ended 0.5p higher at 45p.

The Russian uncertainty hit Aminex, the Irish oil tiddler hoping to develop oil interests in the former Soviet Union. The shares fell to 49p before rallying to 53.5p, down 2.5p.

CIA, the advertising media buyer, improved 8p to 337p as it confirmed a link with CDP, closely associated with Dentsu, the Japanese group claiming to be the world's largest advertising agency. The two have formed a jointly owned company.

Shares started the account in fine form with the FT-SE 100 index up 28.4 points at 3,067.7 and the FT-SE 250 index 12.6 up at 3,439.3. Turnover was 552.3 million shares with 29,356 bargains. The account ends on 15 October. Government stocks were firm.

Metsec, a Midlands group making products for the building, engineering and electronic industries, is expected to move decisively back into the black this year. A profit of at least pounds 1.2m is expected, compared with a loss of pounds 730,000. The stockbroker Albert E Sharp is looking for pounds 1.7m next year. The shares, placed at 67p eight years ago, are now 95p against a 210p high.

Regal Trade, thought to shelter the identity of a little-known overseas investor, has been busy increasing its interest in minor property plays. It has lifted its stake in Bolton Group to 8 per cent and in Safeland to 6.9 per cent. Bolton held at 36p; Safeland edged ahead 0.5p to 38p. Regal, seemingly a passive investor, has had little contact with the two companies.

Barclays de Zoete Wedd, the securities house, is offering US- style warrants on a basket of shares in the hard-pressed food retailing sector. The warrants, already named the 'trolly warrants', embrace the four leading supermarket groups, plus Iceland, Kwik Save and Wm Morrison. The issue involved 5.5 million warrants. They expire in April 1995.