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.
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.Reuse content