LONDON Inflation forecast boosts prices

Press, 14 October 1985, Page 35

LONDON Inflation forecast boosts prices

NZPA-RES London Equity prices in London rallied in the latter part of last week after a dull start with sentiment helped by a forecast by the Chancellor of the Exchequer, Mr Lawson, that inflation should decline below 4 per cent by the middle of next year. The equity market showed little or no reaction to the 0.3 per cent rise in September producer prices, the 0.1 per cent decline in retail prices or the 1% per cent September rise in sterling M 3 (total) money supply. The money supply data, however, had an adverse effect on Government bonds, which showed scattered falls of around % point at the longer end. The FTIOO index rose 9.3 points to 1322.3 while the FT3O rose 11.0 points to a record 1027.5, which compares with the previous record close of 1024.5 reached on January 22, and a record peak of 1024.8 points on September 9. Among leaders, BTR rose 23p to 386, GKN 16p to 253, Blue Circle 20p to 541, GEC 12p to 164, and Hawker 18p to 401, but Hanson Trust lost 6p to 200 on worries about the outcome of the SCM bid, and ICI fell 8p to 639.

Imperial Group added 3p to 210 after announcing it would not join the Elders IXL-led consortium bid for Allied Lyons. Allied fell 16p to 275 while Elders rose 3p to 196.

Distillers ended 3p higher at 425 after reports that the Takeover Panel is insisting that Argyll Group cannot launch its proposed £1.5 billion bid for Distillers before December. Argyll was lOp lower at 333.

The SGB Group jumped 60p to 222 after C. H. Beazer said it would tender for 25 per cent of SGB on the basis of 46 new Beazer shares for every 100 in SGB. Beazer lost 8p to 460. The Carlton Communications talks with Thames Television’s major shareholders, Thorn EMI and BET, on acquiring Thames, pushed Thorn and BET higher initially, but both issues came off the highs after the Independent Broadcasting Authority blocked the bid. Thom lost a net 13p to 354, but BET rose 21p to 333. Carlton was suspended at 825 p on Monday, returned from suspension at 790 on Friday and ended the week at 800. BET also made a £6.2M bid for G. W. Sparrow, which jumped 32p to 71. Sparrow rejected the BET offer.

Elsewhere on the bid scene, Abbey PLC added 12c to 102 after rejecting a bid approach from French Kier, up 23p at 212. Owen rose 35p to 450 after Clayform Properties made a £38.3M bid for the company. Owen rejected the bid, and Clayform, which also released interim results, ended 5p higher at 213. In the engineering sector, Westland rose 18p to 83 and British Aerospace gained 35p to 460 on news that India is close to contracting to buy 21 Westland helicopters and 11 Aerospace Sea Harrier jump-jets, worth a total of about £235M.

Banks were generally firmer with Barclays up 17p at 399 and National Westminster 22p better at 659.

Insurances were also firm and showed little reaction to a statement by the British Secretary of Social Services that he was reconsidering the plan to abolish the State earaings-related pension scheme. Britannic rose 24p to 782 while Royal added 17p to 683. Oils were dull on weak spot crude oil prices with BP 7p off at 541 and Shell 12p lower at 688. Sears lost 3%p to 108% after reporting interim results this week.

South African gold shares ended little changed on the week as the bullion price continued steady. The Kruger Day holiday in the Cape on Thursday also contributed to the lack of investor interest, dealers said. Randfontein was up % pf a dollar at 76% and the light-weight issue, Harties, rose 3c to 388. In financials, Cons Gold added 7p to 434 while Anglos was unchanged at ?11%. De Beers ended the week 10c higher at 440 c.

Closing prices on the London Stock Exchange were (midprice): Ampol 124%, Allied Lyons 275, ANZBank 257%, BP 541, BHP 433%, BAT 271, British Oil Corp 213 (previous — 210), BTelecom 191, Bwarloan 3%, 36%, Dalgety 452%, Deßeers 440 U.S. cents, Distillers 425, Elder Smith 195%, FletcherC 112%, Glaxo 13-29/64, ICI 639, Lloydsßank 424, Marks and Sp 166, NthßH 123%, NZI 70%, P and O 440, Plessey 129, Prudential ‘A* 712, Reedlnt 691, RenisonCons 274%, Reuter ‘B‘ 312, RTZReg 556%, RTZBear 555, ShellTr 686, ThornOrd 354, TozerKM 52, Transport Deve. 120, Unilever 10-17/32, Western Min 191%, Westpac 260%.