WINNERS AND LOSERS: An annus horribilis for equities

Few investors will remember 1994 with much affection. Regardless of how they chose to weight their portfolios between equities and fixed-interest bonds, they would have been better off leaving their cash in the building society.

For the second year running small companies outperformed their larger peers, with the FT-SE Small Capitalisation Index faring better than the middle-sized FT-SE 250 companies. These in turn did better than the shares of the largest companies in the FT-SE100.

None of the indices, however, was covered in glory, with even the small companies falling 5.7 per cent on average. The middle 250 companies fell 7.5 per cent, while the FT-SE 100 ended the year 9.2 per cent lower than it started.

Despite strong earnings growth from many companies as margins were rebuilt after the recession, shares were dragged down by gilts, where yields rose from 6 per cent to 8.5 per cent during the year. That pushed the value of 10-year bonds 15 per cent lower.

Of the largest 100 companies only 28 managed any gain at all, while only 11 rose more than 10 per cent to give shareholders any chance at all of making money after dealing costs.

Of the Footsie laggards, 43 slipped by more than 10 per cent and eight lost more than a quarter of their value. After three strong years for shares, 1994 was truly an annus horribilis.

As the tables show, British Steel emerged at the top of the heap as it benefited from resurgent demand for primary materials, always the first to gain from economic upturn.

BP also saw the oil price rise during the year from $13 a barrel to $16 and the company, now Britain's largest, appears to have fully recovered from the dark days of three years ago.

Another recovery story, at Archie Norman's Asda, stood out among the Footsie's few winners. Three years ago Asda was also the ugly duckling of its sector and even after another strong year is still rated at a discount to some of its historically strongerpeers.

Elsewhere in the top ten, bid speculation in the electricity sector following Trafalgar's swoop on Northern helped Eastern and Southern Electric to sparky performances.

The bottom end of the Footsie was propped up by Kingfisher, the Woolworths owner, which has suffered even more than the rest of the dispirited retail sector.

Other laggards included a sprinkling of builders and property companies, which have both had a dismal year following the optimism of 1993. Land Securities just escaped the bottom of the table with its 24 per cent decline but MEPC continued to disappoint the market with poorer than expected asset growth.

The weakness of the Hang Seng index during 1994 dragged down HSBC and Cable & Wireless, whose largest investment is its stake in Hongkong Telecom. The Hong Kong market lost 31 per cent during the year.

Other losers included the big insurance companies, which face tough disclosure requirements, have lost money on their stock market investments and struggled to cope with lower sales of pensions and life insurance policies.

Among the medium sized companies, bid activity boosted three of the top ten. The paper maker Portals doubled in value as De La Rue, the banknote printer, paid top dollar for access to the 88 per cent of the world paper money market controlled by state-owned printers.

VSEL soared after British Aerospace and Lord Weinstock's GEC battled for control of the Trident submarine maker. The bids are on hold as the Monopolies Commission mulls over the competition issues.

Northern Electric is currently fending off a bid from Trafalgar House, which some observers think marks the prelude to a wave of corporate activity in the RECs sector.

Also in the top ten is Berisford, which is suspended while the company sorts out a rights issue to fund its acquisition of Welbilt, the American kitchen equipment maker. The company has been transformed since the sale of British Sugar allowed it to rebuild itself via the acquisition of kitchens group Magnet.

Propping up the middle-sized companies was Eurotunnel, whose shares lost half their value as the market worried that shareholders will be tapped for yet more cash to tide it over.

Other dreary performances were registered by a clutch of housebuilders - Persimmon, Berkeley and Wilson Bowden - and Heywood Williams in the building materials sector.

As usual the real place to make and lose money was among the market's tiddlers, where seven companies tripled in value and the same number lost more than 90 per cent of their shareholders' investment.

The credit reference business UAPT-Infolink found itself in a bid battle, which pushed its shares up from 73p to 635p. The car part designer Hawtal Whiting was given a boost by Postel, which backed a rights issue.

Bullers shares collapsed after a capital reconstruction replaced 1,000 old shares with one new one. What was left of Shoprite's assets were picked up on the cheap by Kwik Save.

So, a dismal year in the main, and a timely reminder to readers following share tips in this and other newspapers that the only way to avoid disasters is to have a widely spread portfolio.

Suggested Topics
On the last day of campaigning before the polling booths open, the SNP leader has written to voters in a final attempt to convince them to vote for independence
voicesIs a huge gamble on oil keeping the First Minister up at night?
Life and Style

Apple has been hit by complaints about the 1.1GB download

Arts and Entertainment
Liam Neeson said he wouldn't

Liam Neeson's Downton dreams

A 'Sir Alex Feguson' tattoo

Arts and Entertainment
Ben Whishaw is replacing Colin Firth as the voice of Paddington Bear

Thriller is set in the secret world of British espionage

Life and Style

Life and Style

Bomber jacket worn by Mary Berry sells out within an hour

Life and Style
Alexander McQueen A/W 2014
fashionPolitics aside, tartan is on-trend again this season
Arts and Entertainment
Rapper Jay Z performs on the Pyramid Stage at Glastonbury in 2008
musicSinger sued over use of the single-syllable sample in 'Run This Town'
Joel jumps over the board...and into a giant hole
footballFrom joy to despair in a matter of seconds
ebooksAn unforgettable anthology of contemporary reportage
Arts and Entertainment
Pointless host Alexander Armstrong will voice Danger Mouse on CBBC

Much-loved cartoon character returns - without Sir David Jason

Arts and Entertainment
Meera Syal was a member of the team that created Goodness Gracious Me

Actress to appear in second series of the hugely popular crime drama

Arts and Entertainment
The former Doctor Who actor is to play a vicar is search of a wife

Matt Smith is set to join cast of the Jane Austen classic - with a twist

Life and Style

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

SQL Developer - Watford/NW London - £320 - £330 p/d - 6 months

£320 - £330 per day: Ashdown Group: The Ashdown Group have been engaged by a l...

Property Underwriter

£70-90,000: Saxton Leigh: Our client a London Market Insurer are seeking a Pro...

Operational Risk Manager - Asset Management

£60,000 - £80,000: Saxton Leigh: Our client is an leading Asset Manager based...

Trainee Recruitment Consultant Birmingham

£18000 - £23000 per annum + Comission: SThree: The SThree group is a world lea...

Day In a Page

Mystery of the Ground Zero wedding photo

A shot in the dark

Mystery of the wedding photo from Ground Zero
His life, the universe and everything

His life, the universe and everything

New biography sheds light on comic genius of Douglas Adams
Save us from small screen superheroes

Save us from small screen superheroes

Shows like Agents of S.H.I.E.L.D are little more than marketing tools
Reach for the skies

Reach for the skies

From pools to football pitches, rooftop living is looking up
These are the 12 best hotel spas in the UK

12 best hotel spas in the UK

Some hotels go all out on facilities; others stand out for the sheer quality of treatments
These Iranian-controlled Shia militias used to specialise in killing American soldiers. Now they are fighting Isis, backed up by US airstrikes

Widespread fear of Isis is producing strange bedfellows

Iranian-controlled Shia militias that used to kill American soldiers are now fighting Isis, helped by US airstrikes
Topshop goes part Athena poster, part last spring Prada

Topshop goes part Athena poster, part last spring Prada

Shoppers don't come to Topshop for the unique
How to make a Lego masterpiece

How to make a Lego masterpiece

Toy breaks out of the nursery and heads for the gallery
Meet the ‘Endies’ – city dwellers who are too poor to have fun

Meet the ‘Endies’ – city dwellers who are too poor to have fun

Urbanites are cursed with an acronym pointing to Employed but No Disposable Income or Savings
Paisley’s decision to make peace with IRA enemies might remind the Arabs of Sadat

Ian Paisley’s decision to make peace with his IRA enemies

His Save Ulster from Sodomy campaign would surely have been supported by many a Sunni imam
'She was a singer, a superstar, an addict, but to me, her mother, she is simply Amy'

'She was a singer, a superstar, an addict, but to me, her mother, she is simply Amy'

Exclusive extract from Janis Winehouse's poignant new memoir
Is this the role to win Cumberbatch an Oscar?

Is this the role to win Cumberbatch an Oscar?

The Imitation Game, film review
England and Roy Hodgson take a joint step towards redemption in Basel

England and Hodgson take a joint step towards redemption

Welbeck double puts England on the road to Euro 2016
Relatives fight over Vivian Maier’s rare photos

Relatives fight over Vivian Maier’s rare photos

Pictures removed from public view as courts decide ownership
‘Fashion has to be fun. It’s a big business, not a cure for cancer’

‘Fashion has to be fun. It’s a big business, not a cure for cancer’

Donatella Versace at New York Fashion Week