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Shares: Jarvis trio sell for a handsome return but face investors' ire

If share price performance is a measure of popularity, Paris Moayedi should be the toast of the City. Shareholders who backed the chief executive of Jarvis, the engineering and construction group, two years ago will have seen the value of their investment rise twentyfold as Mr Moayedi snapped up bits of the former British Rail at bargain prices.

Even so, the only words used to describe Mr Moayedi in the City this morning are likely to be those of the four-letter variety. The problem is that Mr Moayedi and two fellow directors yesterday sold a chunk of their shares. The sales, announced after the market closed, brought in pounds 2.65m each for Mr Moayedi and Henry Lafferty, the finance director, while the executive director David Freeborn pocketed pounds 1.33m.

Nothing wrong with that, you may say, especially as the directors had announced their intention to sell in June and the proceeds will help them exercise more share options. All three directors retain a significant shareholding.

The trouble is that the sales, at 408p, come after a sharp rise in Jarvis's share price this week. On Monday, the group unveiled a repair and inspection agreement with Royal & Sun Alliance, the insurer and a deal with Railtrack to oversee infrastructure work. Since the news the shares, which closed up 1.5p at 409.5p yesterday, have risen by 7 per cent. If the directors think now is the right time to sell, where does that leave the investors who bought earlier this week?

Of course, Mr Moayedi and his colleagues have done nothing wrong. But they may face a slightly frostier reception than they are used to next time they pay their shareholders a visit.

The day's trading got off to a shaky start as a power cut in central London blacked out dealers' Reuters screens. Once the systems were up and running, the FTSE soon rallied, though it eventually closed down 5.9 points after early falls on Wall Street.

Reports that the merger between SmithKline Beecham and American Home Products could take months to complete left dealers with a hangover after the euphoric reaction to the previous day's announcement. Smithkline shares fell 34p to 706p.

However, the headaches did not stop investors from trying to spot the next blockbuster merger. Zeneca, long the favourite candidate, put on another 83p to 2440p, while Nycomed Amersham added 45p to 2442p.

Companies with exposure to Hong Kong came under renewed pressure after the Hang Seng index fell 2 per cent overnight. HSBC gave up 50p to 1404p, while P&O slid 19p to 672 on fears that the Asian turmoil would dent its container shipping business. Engineer Syltone dropped 13p to 103.5p after warning of delays in payments from its Asian trade debtors.

Shares in GGT plunged 80p to 123.5p after the advertising group confirmed reports that it had lost its account with consumer giant Procter & Gamble. The account, worth about 6 per cent of the group's annual revenues, was lost after key staff resigned from GGT.

The end of the bid battle for Allied Colloids, with US suitor Hercules capitulating after Swiss rival Ciba came up with knock-out 205p offer, prompted a rush of speculative interest in other chemical stocks as investors wondered who Hercules might turn its guns on next. British Vita was the market's favourite, rising 14p to 225p. Also in demand were Inspec, up 8p to 211p, and Laporte, 12.5p higher at 630p. Allied Colloids eventually closed at 201p, up 1.5p, after a mammoth 92m shares changed hands.

JD Sports added to the gloom hanging over the retail sector with a warning that its trainers weren't selling as well as expected. The shares dropped 21.5p to 109p. Similarly-named JJB Sports suffered from the fallout and closed 7p lighter at 651.5p.

IT stocks continued to be in favour. Eidos, the computer games group, scored a 132.5p gain to 872.5p after a bullish trading statement highlighted the success of adventure game Tomb Raider II, featuring pneumatic heroine Lara Croft. Compel, the IT consultancy, jumped 19.5p to 355.5p on expectations of a bullish interim results, due in February.

Proteus, maker of a kit that allows slaughtered cows to be tested for BSE, firmed 3.5p to 79.5p on whispers that supermarket giant Sainsbury was close to signing a deal to use the test on its beef. The shares hit 83p on Monday when the group's Dublin-based licensee announced a deal to test beef for an Irish supermarket chain.