Sun Life shines out in a dull investment climate

MARKET REPORT

The shine quickly came off Sun Life and Provincial when the insurance group's shares returned to the stock market after a five-year absence.

In early trading they touched 243p in their when issued form. It was a solid if unspectacular advance from the 235p flotation price. But demand in the after market was barren and by the close the price had relapsed to 232p.

Sun Life disappeared when Liberty Life of South Africa and UAP of France gained control. Last year UAP took over Liberty's interest.

The French giant retains a controlling interest following the share sale.

The flotation price was in the middle of the forecast range, netting UAP around pounds 526m.

The low key response did not worry Sun Life. Said a spokesman: "This comes as no surprise. All the comments have been this was never going to be a rocketship but that these were shares to tuck away for the long term."

Even so Sun Life produced rewarding business for a market almost starved of action. Seaq put volume at 41.7 million making the shares easily the most actively traded.

The rest of the market drifted aimlessly in the summer sunshine with no hint of any determined investment interest filtering through the general air of lethargy.

With many institutions seemingly content with their portfolios there appears to be little incentive for the round of late adjustments which often occur as a quarter comes to an end.

Said one trader: "So far there has been very little window dressing and unless the market moves sharply there is unlikely to be." The FT-SE 100 index slipped 11.5 points to 3,710.8, provoking worries about its ability to hold above 3,700 in the dull investment climate. Turnover was just below 600 million shares which means the market is perilously close to sliding into the red.

Among blue chips British Aerospace rose 14p to a 990p peak on hopes of defence contracts but the three Footsie newcomers suffered the fate of many before them, an uninspiring debut.

Next lost 7p to 585p; Orange 6p to 237.5p and United News & Media 3p to 719p.

British Biotech endured another uncomfortable session, losing 108p to 2,400p Panmure Gordon is suggesting a switch into Chiroscience, off 16p to 453p. Celsis International added 6p to 122p following institutional meetings.

Another newcomer, Sinclair Montrose Healthcare, made the expected healthy start, closing at 167p against a 140p placing price. The company has a computerised staff bank from which NHS trusts draw doctor and nursing cover.

Amersham International was another healthcare group in demand. The shares gained 21p to 1,018p, inspired by a one million agency cross at 1,045p.

BTR's analyst meeting left the shares a shade lower at 255p with the 95/96 warrants slipping 0.5p to 8p.

On the media pitch Mirror Group slipped 4p to 209p as Panmure Gordon shaded its profit forecasts; Columbus, the travel publisher, edged ahead 2p to 21p. Yorkshire Tyne Tees Television continued to enjoy bid speculation, putting on 10p to 1,148p.

Tullow Oil added 3.5p to 89.5p as it duly rolled out a pounds 30.3m rights issue at 80p a share. The ratio is one-for-five.

Hambros, the merchant bank, gained 7p to 237p in brisk trading. Takeover talk is never far from the group but the latest share run - up 11p in two days - is thought to owe more to its controlling stake in Hambro Countrywide, the estate agent which should be reaping rewards from the belated upturn in the housing market. Countrywide gained another 2p to 88p and John D Wood 4p to 64p.

Union, the financial group which is also a regular subject of bid talk held at 91p although two delayed trades created interest. There was speculation of a Continental banking bid. Joseph Lewis, the reclusive Bahamas-based investor, has a 16.27 per cent interest. The talk is he has agreed to sell to the predator.

Debt stricken Eurotunnel managed a 2p advance to 107p as it edged slowly towards a deal with its 225 banks. Current guess is the banks may swap around 50 per cent of the group's pounds 8.8bn outstanding debt for equity. Some form of outline agreement may be produced at Thursday's shareholders meeting.

Wace, the printer, reflected worries about its accounting policies, falling 9p to 182p, a 12 month low.

Cedardata, the computer group, firmed to 186p. Greig Middleton, the stockbroker, placed four million shares with institutions at 180p.

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