Norwich is no help as funds rush to buy financials

MARKET REPORT

The Norwich Union discount could put further pressure on City institutions striving to adjust their portfolios to the new financial climate.

The insurer's members-come-shareholders will be offered up to half the shares available in the group's flotation. The stock market took the view that the cut-price offer was sufficiently generous to encourage Norwich members to take up extra shares, thereby reducing the amount available for outside investors, particularly institutions.

The flotation of Norwich and a host of building societies has thrown the normally carefully structured weightings of many funds into disarray.

Hence the institutional rush to buy financial shares to try and keep their ratios intact. "Norwich has offered fund managers little comfort", said one market man.

The price range was lifted from 220p to 265p in March to 240p to 290p. Members get a 25p a share discount.

The Norwich arrival, just after Chancellor Gordon Brown is due to deliver his first Budget, is, on present form, seen as a surefire success, with the shares expected to move comfortably above 300p. But Mr Brown could upset the Norwich apple cart if his measures put the market into retreat.

Legal & General was the most obvious beneficiary of the Norwich terms, gaining 20.5p to 455.5p. Others up in sympathy included GRE and General Accident.

Many observers believe Norwich, despite a capitalisation of up to pounds 5.6bn, could quickly find itself involved in takeover action. The soon-to-be- quoted Halifax is one possible bidder. But Norwich may not stand still to await its predicted fate. It may well decide to strike the first blow.

Footsie climbed 34.5 points to 4,642, reflecting relief over the no-change US interest rate decision. At one time the index was up 46.3.

The biobabes had a shocking time. Celltech fell out of its pram after Bayer decided to abandon a septic shock drug developed with Celltech. The German giant had made positive noises about the treatment in the past few weeks..

Celltech tumbled 289p to 341p; Scotia 10p to 392.5p and Biocompatibles International 32.5p to 1,330p. Cantab Pharmaceuticals gave up 47.5p to 917.5p.

Bluebird, the toys group, was another major casualty, slumping 63p to 106.5p as it warned about profits. The shares touched 385p 18 months ago.

Sketchley, off 23p to 65p, Drings of Bath (1p to 2p) and Coutts Consulting (12p to 35.5p) were others inflicting trading gloom on their shareholders. London & Edinburgh, a publisher which came to market in August forecasting profits of pounds 400,000, fell 2.5p to 9.25p after saying profits would in fact be around pounds 220,000. The shares were floated at 10p.

Rolls-Royce flew 5.5p higher to 245p. After the market closed the aero engines group disclosed that once again overseas shareholders could be forced to sell shares as foreign investment had reached the maximum 29.5 per cent of the capital. The ceiling was imposed by the Government to ensure Rolls remained under British control. Rolls and British Aerospace, which has a similar ceiling, have without success made representations to get the restriction removed.

In the past when foreign shareholdings have broken through the ceiling, Rolls has been forced to sell the offending shares, creating angry responses from the shareholders involved who are often out of pocket.

Land Securities, up 29.5p to 873.5p, led properties higher as it reported a 13.3 per cent NAV increase. British Land added 28p to 588.5p and Brixton Estates 11.5p to 210p.

Cadbury Schweppes, weak lately, rose 16p to 541.5p following analyst meetings and Merrill Lynch offered a gentle nudge to Railtrack, up 8.5p to 440p. Engineer Cobham rose 5p to 643.5p following the Henderson Crosthwaite investment dinner.

Pilkington's new chief executive lifted the shares 6p to 121.5p with the warrants 3.5p higher at 17p.

An encouraging trading statement from Arjo Wiggins Appleton helped the hard-pressed packaging and paper sector. Arjo put on 6.5p to 174p and Rexam 7p to 283p.

Publisher Adscene held at 149.5p; its decision not to sell its commercial printing arm is seen as supporting takeover speculation.

The day's newcomer, the Eagles rugby club, was kicked into touch, trading at 33.5p against a 40p placing.

Airtours continued its up-and-away performance, rising 12p to 1,013.5p on the summer holiday boom and speculation that the US cruising group, Carnival, could mount a bid.

Taking Stock

Aminex, the oil group where the World Bank and Russian investors have substantial shareholdings, rose 11.5p to 85p, a new high, after disclosing its long-awaited Russian deal. It has agreed to develop, in partnership with local interests, oilfields in Tatarstan, a Russian republic, which has sizeable reserves. Aminex, run by Brian Hall, already has substantial interests in the former Soviet Union. Last year it lost $955,000 against $2.4m in the previous year.

Peterhead, a crane and forklift truck group born out of the old World Fluids shell, rose 3p to 69.5p after reporting a pounds 714,000 first-quarter profit and the pounds 500,000 acquisition of a Humberside crane company. Although operating in England and Scotland, Peterhead's shares remain on the Dublin market.

News
i100
News
Netherlands' goalkeeper Tim Krul fails to make a save from Costa Rica's midfielder Celso Borges during a penalty shoot-out in the quarter-final between Netherlands and Costa Rica during the 2014 FIFA World Cup
newsGoalkeepers suffer from 'gambler’s fallacy' during shoot-outs
News
people
Arts and Entertainment
Standing the test of time: Michael J Fox and Christopher Lloyd in 'Back to the Future'
filmReview: A week late, Secret Cinema arrives as interactive screening goes Back to the Future
PROMOTED VIDEO
Travel
travel
Arts and Entertainment
Sydney and Melbourne are locked in a row over giant milk crates
artCultural relations between Sydney and Melbourne soured by row over milk crate art instillation
Arts and Entertainment
Adèle Exarchopoulos and Léa Seydoux play teeneage lovers in the French erotic drama 'Blue Is The Warmest Colour' - The survey found four times as many women admitting to same-sex experiences than 20 years ago
filmBlue Is The Warmest Colour, Bojack Horseman and Hobbit on the way
Arts and Entertainment
Preparations begin for Edinburgh Festival 2014
Edinburgh festivalAll the best shows to see at Edinburgh this year
News
Two giraffes pictured on Garsfontein Road, Centurion, South Africa.
i100
Environment
View from the Llanberis Track to the mountain lake Llyn
Du’r Arddu
environmentA large chunk of Mount Snowdon, in north Wales, is up for sale
News
ebookA unique anthology of reporting and analysis of a crucial period of history
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

Regulatory Reporting-MI-Bank-Cardiff-£300/day

£200 - £500 per day + competitive: Orgtel: I am currently working on a large p...

Trainee Recruitment Consultant - Birmingham - Real Staffing

£18000 - £23000 per annum + Commission: SThree: Real Staffing are currently lo...

Training Programme Manager (Learning and Development)-London

£28000 - £32000 per annum + benefits: Ashdown Group: Training Programme Manage...

1st Line Support Technician / Application Support

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

Day In a Page

Dress the Gaza situation up all you like, but the truth hurts

Robert Fisk on Gaza conflict

Dress the situation up all you like, but the truth hurts
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
5 News's Andy Bell retraces his grandfather's steps on the First World War battlefields

In grandfather's footsteps

5 News's political editor Andy Bell only knows his grandfather from the compelling diary he kept during WWI. But when he returned to the killing fields where Edwin Vaughan suffered so much, his ancestor came to life
Lifestyle guru Martha Stewart reveals she has flying robot ... to take photos of her farm

Martha Stewart has flying robot

The lifestyle guru used the drone to get a bird's eye view her 153-acre farm in Bedford, New York
Former Labour minister Meg Hillier has demanded 'pootling lanes' for women cyclists

Do women cyclists need 'pootling lanes'?

Simon Usborne (who's more of a hurtler) explains why winning the space race is key to happy riding
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
Restaurateur Mitch Tonks has given the Great Western Pullman dining car a makeover

The dining car makes a comeback

Restaurateur Mitch Tonks has given the Great Western Pullman dining car a makeover
Gallery rage: How are institutions tackling the discomfort of overcrowding this summer?

Gallery rage

How are institutions tackling the discomfort of overcrowding this summer?
Louis van Gaal has £500,000 video surveillance system installed to monitor Manchester United players

Eye on the prize

Louis van Gaal has £500,000 video surveillance system installed to monitor Manchester United players
Women's rugby: Tamara Taylor adds fuel to the ire in quest to land World Cup

Women's rugby

Tamara Taylor adds fuel to the ire in quest to land World Cup
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