Utilities shrug off windfall fears to retain their glow


Utilities, once seen as the big casualties of a potential Labour government, remain the stock market flavour of this election month.

As equities drifted, unsettled by Friday's New York slump, many of the old privatised groups turned in encouraging performances with leading investment houses continuing to point to their attractions.

The general view is that windfall tax worries have been exaggerated, the regulatory climate is unlikely to deteriorate and dividend growth should be assured.

The English generators, National Power and PowerGen, have been charged up since John Major's come-to-the-polls invitation. NP, 498.5p when the election was called, climbed 9.5p to 535p; PG rose 10.5p to 638.5p from 623.5p. Over the same period Footsie has lost more than 170 points.

NatWest Securities once again drew attention to NP; Morgan Stanley, the US investment house, was another extolling NP's virtues, saying the generator was well-positioned for growth.

The US group also took a shine to National Grid, up 5p at 222p. Energy, one of the former Hanson constituents, also found favour with Morgan, gaining 7.5p to 495.5p. It is in the running to buy the New England Electricity operation. Other utilities higher included Thames Water, up 2.5p at 677p, and ScottishPower, 4.5p at 381p.

Southern Electric, the last survivor of the 1990 regional electricity sell-off, rose 8.5p to 428.5p. Inevitably stories its days of independence will not last much longer are going the rounds. But it is just possible that if there is a change of government Southern will defy the odds and continue to go it alone.

BG had another strong session, gaining 4p to 185.5p, highest since it split from Centrica. The market is reading the delay in its confrontation with Ofgas as a sign it should enjoy a favourable outcome; there is also persistent, if unlikely, speculation of takeover interest with, as usual, unidentified overseas players said to be interested.

BT fell 3.5p to 438p. Shareholders meet today to approve the merger with MCI, the US group. The proposed deal has prompted Societe Generale Strauss Turnbull to produce some telephone number profits. For the year ended last month its is looking for pounds 3.15bn; this year the forecast is pounds 4.3bn and next year SocGen is shooting for pounds 5.75bn. The securities house believes the shares are a buy and points to the possibility that many UK institutions are likely to be "substantially underweight" once the merger is completed.

Footsie ended 19 points lower at 4,251.7. In early trading it was off 37.8. The interest rate cloud continues to hover threateningly with increases on both sides of the Atlantic regarded as foregone conclusions.

The decline was accentuated by dividend payments removing almost 7 points from the calculation. Shell fell 33.5p to 1,026p although going ex-dividend cost 28.13p.

General Electric Co firmed to 370p. The electronics giant is still trying to get involved in the Thomson-CSF sell-off in France and could be holding talks with the Lockheed Martin group.

Health shares had a downbeat session. Shield Diagnostic, despite another impressive statement, fell 30p to 607.5p. Erik Hornnaess, with Abbott Diagnostics, has become a director and new stockbroker UBS is hosting institutional meetings this week. Celltech lost 10p to 560. SkyePharma, reflecting investment presentations, rose 8p to 83p and ML Laboratories' long decline was arrested with a 15p gain to 192.5p.

Zeneca fell 17p to 1,834p with ABN Amro Hoare Govett adopting a negative stance; the same securities house also hit Next, the fashion retailer. Its sell advice lowered the shares 10p to 621.5p.

JN Nichols, the Vimto soft drink group, fizzed another 9p higher to 206.5p. The shares have risen 20p in three trading days.

Raine, the building group, moved ahead another 1.5p to 19p. Trading was again active with Seaq putting volume at 4.6 million shares. The gossip, which has lifted the shares 2.75p in two trading sessions, ranges from a hostile bid to a big disposal.

The Bardon merger with rival Camas was welcomed with Bardon up 3p at 434.5p and Camas 9.5p higher at 93.5p.

Queensborough, the leisure group, shaded to 33p. There are worries its expansion plans will force a rights issue. But such talk seems wide of the mark. Stockbroker Collins Stewart expects profits this year to move to pounds 4.2m from pounds 3.22m.

Taking Stock

Jarvis, the building and railway maintenance group, jumped 15.5p to 240p; the shares were 4.75p two years ago. Latest excitement stemmed from Jarvis reporting profits would top market hopes. Its stockbroker, Peel Hunt, promptly lifted its estimates. For the period to the end of last month it went from pounds 10.1m to pounds 14.6m and this year from pounds 21m to pounds 27m.

Results should be announced in June; there could be an acquisition before then.

Stories resurfaced Nigel Wray plans to pump Nottingham Forest into one of his quoted vehicles - Carlisle or printer Thomas Potts. Carlisle, a property shell, held at 10.5p; Potts eased to 13.25p. The market believes Potts has a deal lined up which will involve a placing. But it is not convinced it will shoot for Forest.

footballLIVE City face Stoke, while Warnock returns to Palace dugout
Arts and Entertainment
The Doctor and the Dalek meet
tvReview: Doctor Who Into the Dalek more than compensated for last week's nonsensical offering
Arts and Entertainment
Life and Style
3D printed bump keys can access almost any lock
gadgets + techSoftware needs photo of lock and not much more
Arts and Entertainment
Inside the gallery at Frederick Bremer School in Walthamstow
tvSimon Usborne goes behind the scenes to watch the latest series
Life and Style
Silvia says of her famous creation: 'I never stopped wearing it. Because I like to wear things when they are off the radar'
fashionThe fashion house celebrated fifteen years of the punchy pouch with a weighty tome
Arts and Entertainment
Gregg Wallace in Summer's Supermarket Secrets
tv All of this year's 15 contestants have now been named
i100Steve Carell selling chicken, Tina Fey selling saving accounts and Steve Colbert selling, um...
Life and Style
A picture taken on January 12, 2011 shows sex shops at the Paris district of Pigalle.
newsThe industry's trade body issued the moratorium on Friday
ebooksAn evocation of the conflict through the eyes of those who lived through it
Arts and Entertainment
Could we see Iain back in the Bake Off tent next week?
tv Contestant teased Newsnight viewers on potential reappearance
The slice of Prince Charles and Princess Diana's wedding cake and the original box from 29 July 1981
newsPiece of Charles and Diana's wedding cake sold at auction in US
The Ukip leader has consistently refused to be drawn on where he would mount an attempt to secure a parliamentary seat
voicesNigel Farage: Those who predicted we would lose momentum heading into the 2015 election are going to have to think again
Arts and Entertainment
Cara Delevingne made her acting debut in Anna Karenina in 2012
film Cara Delevingne 'in talks' to star in Zoolander sequel
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Law Costs

Highly Attractive Salary: Austen Lloyd: BRISTOL - This is a very unusual law c...

Network Engineer (CCNP, CCNA, Linux, OSPF, BGP, Multicast, WAN)

£35000 per annum: Harrington Starr: Network Engineer (CCNP, CCNA, Linux, OSPF,...

DevOps Engineer (Systems Administration, Linux, Shell, Bash)

£50000 per annum: Harrington Starr: DevOps Engineer (Systems Administration, L...

Data Scientist (SQL, PHP, RSPSS, CPLEX, SARS, AI) - London

£60000 - £70000 per annum: Harrington Starr: A prestigious leading professiona...

Day In a Page

Doctor Who Into the Dalek review: A classic sci-fi adventure with all the spectacle of a blockbuster

A fresh take on an old foe

Doctor Who Into the Dalek more than compensated for last week's nonsensical offering
Ukraine crisis: The phoney war is over as Russian troops and armour pour across the border

The phoney war is over

Russian troops and armour pour into Ukraine
Potatoes could be off the menu as crop pests threaten UK

Potatoes could be off the menu as crop pests threaten UK

The world’s entire food system is under attack - and Britain is most at risk, according to a new study
Gangnam smile: why the Chinese are flocking to South Korea to buy a new face

Gangnam smile: why the Chinese are flocking to South Korea to buy a new face

Seoul's plastic surgery industry is booming thanks to the popularity of the K-Pop look
From Mozart to Orson Welles: Creative geniuses who peaked too soon

Creative geniuses who peaked too soon

After the death of Sandy Wilson, 90, who wrote his only hit musical in his twenties, John Walsh wonders what it's like to peak too soon and go on to live a life more ordinary
Caught in the crossfire of a cyber Cold War

Caught in the crossfire of a cyber Cold War

Fears are mounting that Vladimir Putin has instructed hackers to target banks like JP Morgan
Salomé's feminine wiles have inspired writers, painters and musicians for 2,000 years

Salomé: A head for seduction

Salomé's feminine wiles have inspired writers, painters and musicians for 2,000 years. Now audiences can meet the Biblical femme fatale in two new stage and screen projects
From Bram Stoker to Stanley Kubrick, the British Library's latest exhibition celebrates all things Gothic

British Library celebrates all things Gothic

Forthcoming exhibition Terror and Wonder: The Gothic Imagination will be the UK's largest ever celebration of Gothic literature
The Hard Rock Café's owners are embroiled in a bitter legal dispute - but is the restaurant chain worth fighting for?

Is the Hard Rock Café worth fighting for?

The restaurant chain's owners are currently embroiled in a bitter legal dispute
Caribbean cuisine is becoming increasingly popular in the UK ... and there's more to it than jerk chicken at carnival

In search of Caribbean soul food

Caribbean cuisine is becoming increasingly popular in the UK ... and there's more to it than jerk chicken at carnival
11 best face powders

11 best face powders

Sweep away shiny skin with our pick of the best pressed and loose powder bases
England vs Norway: Roy Hodgson's hands tied by exploding top flight

Roy Hodgson's hands tied by exploding top flight

Lack of Englishmen at leading Premier League clubs leaves manager hamstrung
Angel Di Maria and Cristiano Ronaldo: A tale of two Manchester United No 7s

Di Maria and Ronaldo: A tale of two Manchester United No 7s

They both inherited the iconic shirt at Old Trafford, but the £59.7m new boy is joining a club in a very different state
Israel-Gaza conflict: No victory for Israel despite weeks of death and devastation

Robert Fisk: No victory for Israel despite weeks of devastation

Palestinians have won: they are still in Gaza, and Hamas is still there
Mary Beard writes character reference for Twitter troll who called her a 'slut'

Unlikely friends: Mary Beard and the troll who called her a ‘filthy old slut’

The Cambridge University classicist even wrote the student a character reference