Market Report: Vodafone punches the right numbers in the US

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The Independent Online
US investors dialled Vodafone, sending the shares of the mobile telephone group climbing 13p to 208p at one time.

Trading was brisk, with the US investment house Goldman Sachs said to be seeking shares.

American investors already account for about 45 per cent of Vodafone's capital and the sudden Goldman interest prompted thoughts of a possible transatlantic takeover strike.

In US terms Vodafone shares are relatively cheap. And the group's success can only enhance its appeal to US interests.

The latest explosion of US interest could, of course, be due to fundamental investment considerations. But the suspicion that one of the big US telecommunications groups could be nursing predatory ambitions added to the excitement.

Certainly there is a formidable case to support stories of a strike, and with its strong US following Vodafone could have difficulty fending off a realisic US challenge. The shares closed at 206p, just below their peak.

Others with mobile telephone interests did well. Cable and Wireless, responding to its Chinese ambitions and positive noises from Barclays de Zoete Wedd, gained 8p to 456p.

The rest of the stock market had a roller-coaster session, ending 7.7 points down at 3,182.6 in occasionally brisk trading. For a tantalisingly brief interlude the 100 index was back above 3,200, but unchanged German interest rates and poor US trade figures prompted a gentle retreat.

The interest rate scenario, with any British increase not expected until late this year, helped utilities, with electricities and waters making progress.

National Power and PowerGen failed to hold early strength provoked by suggestions that the Government would soon be selling its stakes in the two generators.

British Steel was busily traded, ending 4.25p down at 155p. There was evidence of heavy US selling of world steel stocks and BS was unsettled by two big trades at 156p.

General Electric Co remained under the influence of takeover rumours and hopes of a share buy-back. The price rose 3p to 303p. BTR, the favourite to strike, lost 7p to 377p.

Analytical comments created much of the action. The food group Albert Fisher continued to attract downgradings, falling 2p to 47p; Northern Foods lost 7p to 220p on rumoured UBS caution.

Smith New Court lifted Bank of Scotland 4p to 196p following an upgrading, from pounds 426m to pounds 444m, and SG Warburg helped Royal Insurance gain 12p to 290p.

Wellcome gave further ground, off 15p at 704p, as Lehman Brothers suggested a switch into SmithKline Beecham, unchanged at 450p.

Lex Service, the car group, motored 8p to 400p as Smith made encouraging noises but Premier Consolidated Oilfields held at 28.5p, with Charles Stanley forecasting a sharp increase in net income and recommending a buy.

Morgan Stanley, a long-standing fan of the retailer Next, said it expected the shares to hit 300p by the year-end. They rose 3p to 271p. In 1990 the shares were 6.5p. Warburg, up 4p at 758p, enjoyed NatWest Securities support but the mining group RTZ, off 14p at 864p, was hurt by Panmure Gordon sell advice.

Andrews Sykes, the industrial services group, gained 6p to 53p on the 50p European Fire Protection bid. The price advance appeared to reflect EFP's desire to retain the share quote.

Harmony Property, once a pub group, returned to market at 10p, sinking to 9.25p. Waterglade International, the property tiddler, held at 3p as the meeting called to oust the board was adjourned on a technicality.

Kode, the computer group, almost halved to 38p after stumbling into a half-time loss; Azlan, another computer group, lost a further 9p to 179p on rumours of poor trading. The shares have fallen from 281p in June, when a profit warning appeared. They were floated at 230p last year. There is talk that the company will be forced into making a statement about current trading.

Plantsbrook, the undertaker, rose 10p to 148p on the latest share buying by Service Corporation International, the US group buying Great Southern. SCI has nudged its stake just above 3 per cent. Talk of a share buy-back encouraged The Telegraph 20p higher to 381p and United Newspapers improved 17p to 535p on its library capture.

TransTec, the engineer, fell 2p to 70p, ruffled by a 2.3 million agency cross at 67p.

The FT-SE 100 index closed 7.7 points down at 3,182.6 and the supporting FT-SE 250 index lost 1.3 to 3,740.4. Turnover was 674 million shares with 30,449 bargains recorded. Government stocks fell by pounds 1.

John I Jacobs, the shipping broker and owner, firmed 2p to 47p after a visit by the stockbroker Albert E Sharp, expected to take over as corporate adviser. It seems Michael Kingshott, the newly appointed managing director who took a 20 per cent stake, has a following at Sharp. He is seeking to rejuvenate the shipping group and is keen to move into property.

The long-rumoured takeover of Britvic, Britain's second-largest soft drinks group, by PepsiCo seems to be off. Britvic's three brewery shareholders, Bass, Allied-Lyons and Whitbread, resented attempts by the US giant to tie them to Britvic products for seven years. They were prepared to accept a three-year agreement. Bass, the main shareholder, fell 10.5p to 566p.