MARKET REPORT: The Abbey habit leads a return to winning ways

You can't keep a good takeover story down and one of the best yarns to captivate the stock market is swirling around again - that mammoth bid for Abbey National.

On Tuesday shares of the first building society to become a bank enjoyed a rip-roaring session, surging 38.5p to 957.5p as stories flowed of pending bid action from HSBC or BAT Industries.

Then came the fall-out when the rumoured predators kept their powder dry.

But the "Abbey habit" returned yesterday. In busy trading the shares were at one time up 35.5p at 971p. They closed at 961p.

HSBC seems to have ousted BATs, at least in the rumour stakes, as the front runner.

The old Hong Kong & Shanghai Banking Corporation, which owns Midland Bank, is the firm favourite to strike with 1,250p a share again the suggested take out price.

BATs, however, is still thought to hover. Its final unbundling, the demerger of its financial and tobacco interests, seems likely to occur late this year. There is a strong feeling BATs would like to bolster its financial operations before it splits in two.

It could accomplish such an ambition by merging its financial side with Abbey, which would become a much more comprehensive operation, or go along one of the other rumoured routes, bidding for insurance groups Commercial Union or Legal & General.

Abbey, like other financials, has been a beneficiary of the stampede by fund managers to increase their weightings in a bid to accommodate the threatened sector explosion as Halifax et al arrive.

Barclays, the banking group, was another attracting attention on talk of a major deal. It rose 19.5p to 1,285p on revived talk of a sale of its securities arm. The German Commerzbank was named a possible buyer. The rest of the market returned to winning ways with Footsie setting another record with a 12.7 points gain to 4,693.9.

Once again it was unable to hold above 4,700. In morning trading, as buyers moved in ahead of the expiry of the May options, it was up 42.5 at 4,723.7 - another trading peak. As if abashed by its own confidence it eased back and when New York opened with some nervous twitches blue chips were under pressure.

But selective buying ensured Footsie did, at least, end at a peak.

Next, with an upbeat trading statement, led blue chips with a 26p gain to a 720p peak. British Airways, despite a cabin crew strike threat, rose 12p to 760p. Year's figures are due on Monday with around pounds 605m against pounds 568m expected.

Secondary lenders were hit after the Government threatened to clamp down on companies which specialise in lending to "vulnerable borrowers". Cattles dropped 25p to 313.5p; Provident Financial 45.5p to 589.5p and S&U 26.5p to 343.5p.

Another Government intervention, this time alcopops, lowered Bass, the biggest in the business with its Hooper's Hooch accounting for 70 per cent of the market, 13p to 816p.

National Power firmed to 566.5p after selling its 8 per cent stake in Southern Electric to HSBC James Capel. The deal, seemingly signalling the end of NP's ambitions to buy a regional electricity company, was worth around pounds 164m. It acquired the shares during its aborted bid for Southern, the last of the 12 privatised electricity companies to remain independent. Capel provided some acceleration for the transport groups. Its bullish comments lifted FirstBus 21p to 221p and National Express 30p to 517.5p.

Eurotherm, the electronic equipment group, put on 13.5p to 420p on renewed takeover speculation. Since last year's boardroom shenanigans the shares have been hit by worries the strong pound is hurting profits. The price touched 644p last year.

Amstrad, selling its consumer products to Betacom and lifting its stake to 69.7 per cent, rose 2p to 261.5p on hopes of a special dividend. Betacom fell 4.5p to 64.5p.

Adscene, the publisher, rose 7p to 149.5p (after 162.5p) as takeover rumours circulated and Lopex, the advertising agency, gained 2.5p to 38.5p as rival Incepta made what was described as a "tentative" approach.

Capital Radio improved 19.5p to 575p. The shares have come up from 530p this week, largely on the arrival of a new chief executive for its My Kinda Town restaurant chain.

Utilitec, the gas and water services group, lost a further 4.5p to 65.5p, a 12-month low. as Simex, a Lebanese company cut its stake to 9.6 per cent.

Suggested Topics
Sport
sportGareth Bale, Carl Froch and Kelly Gallagher also in the mix for award
News
Japan's Suntory Beverage & Food has bought GlaxoSmithKline's Lucozade and Ribena
news
News
A tongue-eating louse (not the one Mr Poli found)
newsParasitic louse appeared inside unfilleted sea bass
Life and Style
Out and about: for 'Glee' character Bert Hummel, having a gay son was a learning curve
lifeEven 'cool' parents need help parenting gay teens
PROMOTED VIDEO
News
ebooksNow available in paperback
Money
Anyone over the age of 40 seeking a loan with a standard term of 25 years will be borrowing beyond a normal retirement age of 65, and is liable to find their options restricted
propertyAnd it's even worse if you're 40
Arts and Entertainment
Perhaps longest awaited is the adaptation of Jack Kerouac’s On the Road with Brazil’s Walter Salles directing and Sam Riley, Kristen Stewart and Viggo Mortensen as the Beat-era outsiders
books
Arts and Entertainment
theatreSinger to join cast of his Broadway show after The Last Ship flounders at the box office
Life and Style
fashion'To start singing with Pharrell is not that bad, no?'
News
news
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Argyll Scott International: Risk Assurance Manager

Negotiable: Argyll Scott International: Hi All, I'm currently recruiting for t...

Argyll Scott International: Business Analyst - MGA - London Market - Insurance Broker

£50000 - £60000 per annum + benefits: Argyll Scott International: A Business A...

Ashdown Group: PR, Marketing & Events Executive - Southwark, London - £35,000

£30000 - £35000 per annum + benefits: Ashdown Group: PR Marketing & Events Exe...

Selby Jennings: C++ Developer – Hedge Fund – New York

$80000 - $110000 per annum, Benefits: Bonus and Employee Investment Scheme: Se...

Day In a Page

In a world of Saudi bullying, right-wing Israeli ministers and the twilight of Obama, Iran is looking like a possible policeman of the Gulf

Iran is shifting from pariah to possible future policeman of the Gulf

Robert Fisk on our crisis with Iran
The young are the new poor: A third of young people pushed into poverty

The young are the new poor

Sharp increase in the number of under-25s living in poverty
Greens on the march: ‘We could be on the edge of something very big’

Greens on the march

‘We could be on the edge of something very big’
Revealed: the case against Bill Cosby - through the stories of his accusers

Revealed: the case against Bill Cosby

Through the stories of his accusers
Why are words like 'mongol' and 'mongoloid' still bandied about as insults?

The Meaning of Mongol

Why are the words 'mongol' and 'mongoloid' still bandied about as insults?
Mau Mau uprising: Kenyans still waiting for justice join class action over Britain's role in the emergency

Kenyans still waiting for justice over Mau Mau uprising

Thousands join class action over Britain's role in the emergency
Isis in Iraq: The trauma of the last six months has overwhelmed the remaining Christians in the country

The last Christians in Iraq

After 2,000 years, a community will try anything – including pretending to convert to Islam – to avoid losing everything, says Patrick Cockburn
Black Friday: Helpful discounts for Christmas shoppers, or cynical marketing by desperate retailers?

Helpful discounts for Christmas shoppers, or cynical marketing by desperate retailers?

Britain braced for Black Friday
Bill Cosby's persona goes from America's dad to date-rape drugs

From America's dad to date-rape drugs

Stories of Bill Cosby's alleged sexual assaults may have circulated widely in Hollywood, but they came as a shock to fans, says Rupert Cornwell
Clare Balding: 'Women's sport is kicking off at last'

Clare Balding: 'Women's sport is kicking off at last'

As fans flock to see England women's Wembley debut against Germany, the TV presenter on an exciting 'sea change'
Oh come, all ye multi-faithful: The Christmas jumper is in fashion, but should you wear your religion on your sleeve?

Oh come, all ye multi-faithful

The Christmas jumper is in fashion, but should you wear your religion on your sleeve?
Dr Charles Heatley: The GP off to do battle in the war against Ebola

The GP off to do battle in the war against Ebola

Dr Charles Heatley on joining the NHS volunteers' team bound for Sierra Leone
Flogging vlogging: First video bloggers conquered YouTube. Now they want us to buy their books

Flogging vlogging

First video bloggers conquered YouTube. Now they want us to buy their books
Saturday Night Live vs The Daily Show: US channels wage comedy star wars

Saturday Night Live vs The Daily Show

US channels wage comedy star wars
When is a wine made in Piedmont not a Piemonte wine? When EU rules make Italian vineyards invisible

When is a wine made in Piedmont not a Piemonte wine?

When EU rules make Italian vineyards invisible