Spotlight shifts on to the unfashionable Footsie sectors

Derek Pain
Thursday 14 August 1997 23:02 BST
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There are signs the Footsie laggards are beginning to attract investment support.

This year's astonishing blue-chip charge has been due to the strength of financials, accounting for around 27 per cent of the index, drugs and utilities. Many Footsie constituents, as well as the rest of the stock market, limped lamely behind.

This week the climate has changed. Some of the long neglected stocks have advanced as the more glamorous have paused for breath.

BTR, the battered and bruised conglomerate, is the shinning example of the new approach.

Its shares rose a further 13.5p to 214p, a 24p gain since Tuesday. Once more turnover was heavy and again much of the buying originated in the US. Interim profits are due next month and, despite the gloomy trading statement in May, there are hopes the less rampant pound will quickly work its way through and chief executive Iain Strachan could offer encouraging comments on prospects.

Imperial Tobacco, another underperformer, rose 7.5p to 406p and Allied Domecq, frequently engulfed in rumours of corporate activity. frothed 7p higher to 482.5p; a 28p gain this week.

TI, the engineer, down at 456.5p last month, continued to enjoy a re- rating, gaining 5.5p to 605.5p and the P&O shipping line pushed ahead 7.5p to 637.5p.

Just to strengthen the view a new emphasis is emerging, the high-flying financials and utilities were rather subdued.

And the revival among the second and third-liners continued. Engineer Glynwed International, which has had a torrid time, put on 12.5p to 247.5p with Charterhouse Tilney saying buy, and Greenalls, the hotel and pubs chain riding at 605p at Christmas, rose 11p to 477p.

The indices offered further evidence under card shares were intent on catching up with their peers. As Footsie fell below 5,000 points, off 12.3 at 4,991.3, the FTSE 250 index rose 12.9 to 4,689.9 and the SmallCap index made further headway.

At one time Footsie was 28.2 higher. Manoeuvring ahead of today's Footsie options expiry contributed to the volatility.

RMC, the building materials group, remained under pressure as SBC Warburg made negative noises. With Panmure Gordon on the sell tack this week the shares gave up a further 19p to 1,049p.

Zeneca was lifted 24p to 1,910.5p by Dresdner Kleinwort Benson support but Unilever tumbled 26.5p to 1,855p after Schroders declared the shares were 10 per cent over valued and trading at a record premium to the market.

Argos, the catalogue shopping chain with interim results next week, softened 8.5p to 627.5p as Henderson Crosthwaite said sell, but DKB added 12p to Boots at 796.5p.

Ulster TV jumped 32.5p to 199p; Scottish Media, the Grampian and Scottish TV group, acquired 13.1 per cent at 205p, lifting its stake to 14.9 per cent. Although Scottish Media played down any bid ambitions the market believes the share buying is a prelude to eventual corporate activity. Border TV moved ahead 5p to 370.5p in anticipation of bid action.

Albert Fisher, the food group, tumbled 4.75p to 38.75p (after 35.5p) as the whiff of burnt fingers followed the failure of a signalled bidder to appear. The group said talks with an unknown predator had ended. In an endeavour to soften the blow Fisher is planning a share buy-back or special dividend and is near to completing a number of disposals.

Games Workshop, the computer games business jumped 55p to 630p following results. Credit Lyonnais Laing says the shares should be over 700p.

Robert Walters, a recruitment group, climbed 8p to a 325.5p peak. Founder and chief executive Robert Walters sold 8.4 per cent of the capital for pounds 5.8m. He still has 19.6 per cent.

Other directors cut their holdings. The company said the sales, at 299p, were aimed at broadening the market in the shares, floated a year ago at 105p.

Electronic Retailing Systems International, strong on Wednesday, eased 12.5p to 377.5p although Henderson Crosthwaite believe the shares are a strong buy. It says ERSI looks at least as attractive as its Swedish rival which has a pounds 400m capitalisation; ERSI is valued at pounds 80m.

Hotels, weak recently, drew strength from bullish comments from John Jarvis of Jarvis Hotels, and the Millennium & Copthorne figures on Wednesday. JH gained 8p to 157.5p; M&C 10.5p to 389p and Regal Hotels 1.5p to 46p.

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