Market reports: Veba's great escape upsets Footsie's day

THE GERMANS killed any hopes of the market ringing up gains. From the opening bell equities were in retreat, unsettled by the sale by Veba, the German utility, of its 10.2 per cent stake in Cable & Wireless.

Telecoms led the retreat, with Footsie ending 75.4 points off at 6,206.8. At one time it was down 122.8.

C&W tumbled 79.5p to 751p, Telewest Communications 20.5p to 243.5p, and Colt Telecom 51p to 939p. BT dropped 26.5p to 1,058p.

In their hurry to unload the C&W interest, the Germans accepted a 724.2p- a-share deal from ABN Amro, NM Rothschild and Cazenove. The trio went on to place the shares at 735p. With C&W closing at 830.5p on Friday, institutions found the yawning discount irresistible and clamoured to buy the 246 million shares.

Just why Veba was prepared to sell at a price so far below Friday's close is something of a mystery. Certainly it set alarm bells ringing, rousing nagging fears that the first crack had appeared in the seemingly unstoppable telecoms charge. The sale also created doubts about C&W's prospects, with the Germans displaying an apparent lack of faith in the telecoms giant.

It also destroyed most of the day's planned trading. Institutions were left short of cash. They had to find around pounds 1.8bn with settlement due at the end of the week for their C&W shares, so cash they had provisionally earmarked for any other buying operations had to be transferred to their C&W coffers. Few would want to sell shares for special early delivery because of the extra charges involved. Much better, therefore, to put all available resources behind their bids in the C&W auction and delay any buying plans.

With C&W's share turnover a massive 528.6 million, the day's volume almost touched 1.5 billion, one of the highest on record.

With so much attention centred on C&W the rest of the market played an almost inaudible second fiddle. The supporting indices lost their enthusiasm. The mid cap's remarkable 15-day winning streak came to an abrupt end with a 41.9 fall to 5,518.9; the small cap slipped 1.2 to 2,366.6.

The small cap is still being influenced by management buyouts. Housebuilder Cala jumped 50p to 157.5p as a bid of 165p a share was mooted. In a variation on the buyout bandwagon Somic, up 10p at 80p, seems likely to sell its fabrics business to management for around pounds 850,000 and become a cash sell called Tarpan.

Fibernet, although ending talks with possible bidders, firmed 5p to 447.5p and SCi Entertainment ended 22p higher at 81.5p, although the company said it knew of no reason for the advance.

Terranova, the foods group, held at 104.5p despite rejecting an offer of 125p (thought to be from Unigate), and volatile Tracker Network added another 70p to 580p following Friday's management buyout statement.

First Choice, the holidays group, fell 14.5p to 173p after agreeing a merger with Kuoni of Switzerland. Talk of a possible German counter-offer from Preussag continues to be heard. There were vague reports of an Airtours deal, with the shares firm at 507.5p. Constructor Bandt firmed 1p to 32p on bid hopes.

London International, the condom maker where bid talks are on, firmed 2p to 153p in two-way trading. The shares have been unloved since Safeskin, the US group touted as the most likely bidder, posted a shock profits warning.

Manchester United firmed 9p to 240p, a peak, on weekend suggestions that profits from pay-as-you-view television could force BSkyB to increase its bid, currently under Westminster consideration.

Psion, the hand-held computer group, was one of the day's best performers, jumping 105p to 860p on reports that it is moving into mini-notebook computers with IBM selling the equipment in the US; a new trading alliance by its Symbian joint venture was another bullish influence.

Tomkins, on its share buyback, fell 10p to 224.5p, but Reed International, after its recent decline following results, recovered some lost ground, up 25.5p to 525.5p. PowerGen, ahead of analyst meetings this week, rose 13p to 683p. Supermarkets, ruffled in recent weeks by the alleged price war, perked up on hopes that the Office of Fair Trading report will be less draconian than expected.

Enterprise Oil had a shaky time, off 38.25p to 303p. The market is uneasy about the possibility of the planned union with Lasmo failing to materialise. The sale of 1.2 million shares by Mercury Asset Management, part of Merrill Lynch, increased the doubt factor.

HW, a recruitment group, followed Corporate Services with a profits warning and fell 37.5p to 82.5p; Superscape, an IT group, dropped 41p to 149p on a warning.

Queens Moat Houses, once seemingly destined for the corporate graveyard, was little changed at 26.5p after Merrill Lynch upgraded its advice to accumulate. The ending of the hotel chain's interest-payment holiday will lower profits over the next two years but "good management is progressively improving the structure and position of the company".

Viridian, the former Northern Ireland Electricity, was little changed at 693.5p as Warburg Dillon Read increased its target price by 50p to 800p. Shire Pharmaceuticals, after Friday's profits surge, rose 43p to 516.5p, and pub chain JD Wetherspoon frothed a further 15.5p to 273p on its results.

BATM Advanced Communications jumped 32p to 295p ahead of a presentation at stockbroker Shore Capital. Highbury House Communications joined the Internet party, climbing 4p to 17.25p. The company has launched a joint venture to explore various Internet publishing initiatives.

Oxford Biomedica, a gene-therapy group, rose 9p to 27p, apparently on indications that Colin Blackbourn had acquired shares. He gained a reputation as a small company investor with AromaScan, a recent success. The shares have climbed from 1.75p in September to 17.5p (up 0.5p) after being revamped. He claims Oxford, raising cash through a rights issue, has nine promising products in development.

SEAQ VOLUME: 1.49bn

SEAQ TRADES: 94,310

GILTS INDEX: 115.23 -0.05

RICHARD THOMPSON, whose business career has included chairing the struggling first division football club Queens Park Rangers, has become chairman of Whitchurch. He intends to take the former food group into the film and television industries.

He is buying the food operations - largely meat processing and pet-food businesses - for pounds 6.5m. The shares held at 32p. As a food group Whitchurch has struggled; its shares were 65p four years ago.

PETRA DIAMONDS, with interests in Angola, held at 71.5p. Seymour Pierce has become the group's stockbroker, replacing IA Pritchard, which appears to have abandoned its corporate operations.

Petra now has Gold Fields of South Africa as a shareholder. In exchange for shares, it acquired the diamond interests of Gold Fields, which cover rights over 10 properties in South Africa. Petra shares topped 150p last summer; they were floated at 30p by IA Pritchard.

News
Kenny Ireland, pictured in 2010.
peopleActor, from House of Cards and Benidorm, was 68
News
A scene from the video shows students mock rioting
newsSchool leaver's pic YouTube video features staging of a playground gun massacre
Travel
travel
Voices
A family sit and enjoy a quiet train journey
voicesForcing us to overhear dull phone conversations is an offensive act, says Simon Kelner
PROMOTED VIDEO
Arts and Entertainment
The cast of The Big Bang Theory in a still from the show
tvBig Bang Theory filming delayed by contract dispute over actors' pay
Sport
England celebrate a wicket for Moeen Ali
sportMoeen Ali stars with five wickets as Cook's men level India series
News
Morrissey pictured in 2013
people
Life and Style
The director of Wall-E Andrew Stanton with Angus MacLane's Lego model
gadgetsDesign made in Pixar animator’s spare time could get retail release
News
peopleGuitarist, who played with Aerosmith, Lou Reed and Alice Cooper among others, was 71
Travel
travel
News
Robyn Lawley
people
News
ebookA unique anthology of reporting and analysis of a crucial period of history
News
people
News
i100  ... he was into holy war way before it was on trend
Arts and Entertainment
High-flyer: Chris Pratt in 'Guardians of the Galaxy'
filmThe film is surprisingly witty, but could do with taking itself more seriously, says Geoffrey Macnab
News
people
Life and Style
food + drinkVegetarians enjoy food as much as anyone else, writes Susan Elkin
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

1st Line Support Technician / Application Support

£20000 - £24000 per annum: Harrington Starr: A leading provider of web based m...

Team Secretary - (Client Development/Sales Team) - Wimbledon

£28000 - £32000 per annum: Ashdown Group: Secretary (Sales Team Support) - Mat...

Accountant / Assistant Management Accountant

Competitive (DOE): Guru Careers: We are looking for an Assistant Management Ac...

Senior Investment Accounting Change Manager

£600 - £700 per day + competitive: Orgtel: Senior Investment Accounting Change...

Day In a Page

Save the tiger: Tiger, tiger burning less brightly as numbers plummet

Tiger, tiger burning less brightly

When William Blake wrote his famous poem there were probably more than 100,000 tigers in the wild. These days they probably number around 3,200
A tale of two presidents: George W Bush downs his paintbrush to pen father’s life story

A tale of two presidents

George W Bush downs his paintbrush to pen father’s life story
Save the tiger: The day America’s love of backyard tigers led to a horrific bloodbath

The day America’s love of backyard tigers led to a horrific bloodbath

With only six per cent of the US population of these amazing big cats held in zoos, the Zanesville incident in 2011 was inevitable
Samuel Beckett's biographer reveals secrets of the writer's time as a French Resistance spy

How Samuel Beckett became a French Resistance spy

As this year's Samuel Beckett festival opens in Enniskillen, James Knowlson, recalls how the Irish writer risked his life for liberty and narrowly escaped capture by the Gestapo
We will remember them: relatives still honour those who fought in the Great War

We will remember them

Relatives still honour those who fought in the Great War
Star Wars Episode VII is being shot on film - and now Kodak is launching a last-ditch bid to keep celluloid alive

Kodak's last-ditch bid to keep celluloid alive

Director J J Abrams and a few digital refuseniks shoot movies on film. Simon Usborne wonders what the fuss is about
Once stilted and melodramatic, Hollywood is giving acting in video games a makeover

Acting in video games gets a makeover

David Crookes meets two of the genre's most popular voices
Could our smartphones soon be diagnosing diseases via Health Kit and Google Fit?

Could smartphones soon be diagnosing diseases?

Health Kit and Google Fit have been described as "the beginning of a health revolution"
Ryanair has turned on the 'charm offensive' but can we learn to love the cut-price carrier again?

Can we learn to love Ryanair again?

Four recent travellers give their verdicts on the carrier's improved customer service
Billionaire founder of Spanx launches range of jeans that offers

Spanx launches range of jeans

The jeans come in two styles, multiple cuts and three washes and will go on sale in the UK in October
10 best over-ear headphones

Aural pleasure: 10 best over-ear headphones

Listen to your favourite tracks with this selection, offering everything from lambskin earmuffs to stainless steel
Commonwealth Games 2014: David Millar ready to serve up gold for his beloved Scotland in the end

Commonwealth Games

David Millar ready to serve up gold for his beloved Scotland in the end
UCI Mountain Bike World Cup 2014: Downhill all the way to the top for the Atherton siblings

UCI Mountain Bike World Cup

Downhill all the way to the top for the Atherton siblings
Save the tiger: The animals bred for bones on China’s tiger farms

The animals bred for bones on China’s tiger farms

The big cats kept in captivity to perform for paying audiences and then, when dead, their bodies used to fortify wine
A former custard factory, a Midlands bog and a Leeds cemetery all included in top 50 hidden spots in the UK

A former custard factory, a Midlands bog and a Leeds cemetery

Introducing the top 50 hidden spots in Britain