Reuters sparkles as investors hope for share buy-back

MARKET REPORT

Reuters is expected to accompany today's yearly results with details of a share buy-back. The cash rich group is known to be keen on the idea of buying in its own shares, an attitude which helped Reuters gain 13p to 644p, a 12-month high.

Stockbroker Henderson Crosthwaite expects the information group to produce profits of pounds 590m, up from pounds 510m.

Reuters was one of the best-performing blue chips on a day when the stock market was again put to shame by New York which, during London hours, made determined strides towards pushing the Dow Jones Average above 5,600.

The FT-SE 100 index drifted much of the day until it became apparent that Wall Street was again in ebullient form.

The IRA bomb outrage was an inhibiting influence. Insurances, although closing above their worst, were ruffled and the so-called peace dividend quickly evaporated from such shares as Northern Ireland Electricity, off 16p at 410p.

Hampden, the relatively high-profile Ulster retailer where J Sainsbury sits on nearly 30 per cent, fell 7p to 88p and Lookers, the garage group that recently acquired the province's largest motor retailer for pounds 25.3m, reversed 2p to 136p.

The explosion also hit Granada, the leisure group that has to quickly unload unwanted Forte hotels.

Any sign that IRA activity is prompting tourists to stay away from the UK is likely to erode the slow but now quite significant improvement in hotel occupancy rates. And that could make it much more difficult for Granada to complete its disposal programme quickly and at the prices that would make the Forte take-over look realistic. The leisure group is in talks with a host of companies, ranging from Sheraton, the giant US group, to Regal Hotels, a modest UK chain. Sir Rocco Forte, former head of Forte, is also in the Forte hotel hunt. The uncertainty was enough to lower Granada 12p to 712p.

Vosper Thorneycroft, the ship builder, rose 26p to 861p on talk of Ministry of Defence and overseas contracts and Rolls-Royce, still responding to Far Eastern deals, gained 6p to 212p. But British Aerospace remained unsettled by the Fokker debacle, falling 16p to 828p.

Blue Circle Industries was the best-performing blue chip, up 13p to 358p, largely on bullish comments from ABN Amro Hoare Govett.

United News & Media fell 11p to 634p following negative comments from NatWest Securities and would-be partner MAI lost 10p to 425p as Carlton Communication bid hopes faded. Carlton was little changed at 1,036p. Yorkshire- Tyne Tees Television, regarded as the most vulnerable of the surviving regional TV contractors, lost some of last week's sparkle, falling 28p to 872p. Border Television gained 25p to 312p.

Rank Organisation improved 8p to 473p on hopes that Time Warner, planning to spend more than pounds 200m developing leisure operations in the UK, will pick Rank as its partner.

Albert Fisher, the food group meeting analysts this week, added 1p to 44.5p and Northern Foods, firmer at 189p, was helped along by SBC Warburg support.

Fund managers were little changed as the industry prepared itself for another change of ownership. Dunedin, controlled by Bank of Scotland, is expected to change hands this week with Edinburgh Fund Managers, Ivory & Sime and Robert Fleming among the favourites to strike. National Westminster Bank, flushed with cash after selling its US arm and known to be keen on building up its fund management side, could also be in the running.

Dunedin has been plagued by a series of highly publicised fund manager departures. It is expected to command a sale price of around pounds 100m.

Wm Morrison, the supermarket chain, put on 3p to 157p on talk of J Sainsbury interest and Alpha Airport improved 8p to 116p on James Capel interest.

Tepnel Life Sciences, at one time 16p higher, ended 4p off at 70p after the company said it knew of no reason for the sudden demand for the shares which doubled the price last week. Gowring, the Burger King chain, held at 88p as Guinness Peat lifted its stake to 6.37 per cent.

Acorn Computer, weak recently, recovered 12p to 205p and Psion, the hand- held computer group, remained in demand, up 48p at 863p.

Casino shares rose on reported US interest in building up in Europe. Capital Corporation gained 8p to 226p and Stakis 2p to 89p.

TAKING STOCK

r Inspiration, the holiday group that seems to have bucked the industry downturn, could be about to link with an overseas group. Stories are circulating that chairman Vic Fatah is in talks which could lead to a friendly deal with a stake of below 30 per cent being acquired. Inspiration has around 6 per cent of the UK packaged holiday market. Its shares rose 4p to 99p.

r Utility Cable, formed out of the Baillie Gifford Technology Trust, held at 21p. It has scored from the cable laying boom but is making efforts to increase its workload by building its interests in gas and electricity piping. But Utility Cables sees its cable operations offering rich rewards for some years. Stockbroker Greig Middleton expect profits this year to be around pounds 6m.