Cheerful Barclays and despondent BTR steal limelight

MARKET REPORT

Barclays, the banking group, and BTR, the suffering conglomerate, dominated a lacklustre stock market. The bank's story was one of optimism with the shares said to be heading for 900p, but for BTR it was another round of anxiety and uncertainty.

In busy trading Barclays rose 18p to 800p with the market enjoying its adroit sale of part of its 3i shareholding and continuing to speculate it has a big deal on its banking floor, perhaps the flotation of its Barclays de Zoete Wedd investment side.

Rumours BZW is set to be demerged have been flying around the market for some weeks. In some quarters the 3i deal is seen as a forerunner to unlocking BZW.

BTR fell 5p to 259p, lowest for four years. The 1995/96 warrants dropped to 9.5p; they could be dead in the water, giving holders the right to subscribe for one new share at 258p in the 30 days following September's interim report.

The latest decline was sparked by stories that big investors were being sounded out about a possible dividend cut; a reduced profit forecast by BZW and suggestions the conglomerate had called analyst meetings for next week.

BTR refused to confirm any meetings had been arranged. "We never comment on market rumours,", was the company's response to inquiries.

The group has three sets of warrants outstanding. This year's would produce pounds 240m; next year's pounds 350m and the 1997 warrants pounds 425m.

There is little doubt BTR would sorely miss the income as the proceeds have almost certainly been factored into its cash calculations.

The 1997 warrants, also offering a switch into shares at 258p, fell 3.5p to 21.5p; the l998 version is now down to 6p. The strike price is 405p.

The rest of the market had another uneventful session with the FT-SE 100 index giving up 5.1 points at 3,756.4.

Hopes are rising that ScottishPower is on the verge of lifting its offer for Southern Water.

Its first splash, pounds 1.5bn, was topped by Southern Electric's pounds 1.6bn. Scottish shares were little changed at 305p; they have felt the strain of bid action and are only just above their 12-month low.

Southern Electric was dulled 4p to 672p and the target slipped 5p to 988p.

Smith & Nephew, the health-care group, stretched to a new high of 215.25p as takeover hopes mingled with prospects for its artificially grown skin development, but Carlton Communications was caught out by suggestions that Disney was cutting back film production which would hit its video operations.

A 3.08 million sale at 509p also contributed to a 15p fall to 513p.

RTZ improved 11p to 983 as the copper market appeared more stable and Johnson Matthey, the metals group, eased 20p to 630p as SBC Warburg, in a bought deal, took on 9.9 per cent stake from Minorco, the South African group. It was unclear whether Warburg managed to place all the shares at its 625p asking price.

The latest round in the superstore hostilities left Tesco off 5.5p to 300.5p. Asda, which also had to contend with the added setback over its drugs price battle, lost 1.5p to 118.25p.

Cable & Wireless rose 9p to 420p following the flotation of Asia Satellite Communications in Hong Kong; its 33 per cent has been cut to 23 per cent, netting pounds 60m.

Greene King, the East Anglian brewer splashing out pounds 197.5m for The Magic Pub Co, rose 24p to 692p.

Fibernet, planning a national high-speed network, produced a wire-humming debut, touching 139p and settling at 131p against a 100p issue price.

But Carnell, the travel publisher from the Nigel Wray stable, was a disappointment failing to reach its 27p suspension price. The company, now called Columbus, closed at 23p.

Bardon, the aggregates group which has attracted considerable speculative interest in the past, held at 38.75p. A US investment house, Tweedy Browne, has acquired a 3.4 per cent interest.

Mayflower, a specialist engineer, fell 13.5p to 108.5p as its ambitious pounds 172m takeover of the US Pullman group, was abandoned following a rival offer.

Manchester Utd continued to dip, reflecting last week's batch of director share sales. The price fell 19p to 441p. A Merrill Lynch recommendation added 3p to Wembley at 361p.

Andrews Sykes, the air conditioning group, continued to benefit from the hot weather, rising 13p to a 433p peak. The shares were 198p a year ago.

TAKING STOCK

r Details are due this week of the flotation of London & Edinburgh Publishing, producing commemorative brochures for such events as this week's Royal Ascot. Around pounds 1.5m is being raised through the sale of 30 per cent of the company. L&E is also deeply involved in event advertising and is thinking of running a duty-free shopping service on the Internet. John East & Partners and Fiske & Co are handling the flotation which is expected to value the company at around pounds 4.5m.

r A De Gruchy, running Jersey's top department store, continues to attract attention.

Merchant Retail Group, which operates the Jopling stores, has acquired another 136,400 shares, lifting its stake to 24.09 per cent. De Gruchy, unchanged at 195p, has said it wants to talk to MRG.