Bottom Line: Medical firms suffer

INVESTORS will have to get used to sudden share price movements as the inevitable result of the Stock Exchange's desire to clamp down on leaks of price-sensitive information. Trading statements published through official channels will become more common, and where the news is bad, price corrections will follow.

Investors in Bespak, a maker of medical instruments, are already feeling the effects. Bespak's share price has fluctuated wildly this year as the company has published a succession of trading statements.

Shares fell from 700p in March to 460p before the publication of annual results in early July, as doubts circulated about the Clinton healthcare reforms.

But in response to mildly positive sentiments expressed when the results came out, the shares revived and peaked at 600p in late August. However, the stock dipped back below 500p in September after Bob King, the chairman, voiced caution in his agm statement. Yesterday's warning about trading in the US wiped a further 35 per cent off the shares.

Companies can smooth the path by giving investors appropriate information in full. Bespak has not done itself any favours putting out news in dribs and drabs.

Bespak's US troubles send a second message to investors. While the Clinton reforms remain a long way from implementation, the effects are being felt by medical instrument makers as well as the drug companies. Watch out BOC, Smith & Nephew and Smiths Industries, to name but three.