LONDON Sterling’s outlook lowers market

Press, 21 July 1986, Page 28

LONDON Sterling’s outlook lowers market

NZPA-Reuter

Equities ended lower on the first leg of the fortnightly account in London on Friday. Trading was marked by significant falls at the beginning and end of the week.

Trading began with the news over the week-end of the failed £1.27 billion bid by Lloyds Bank for control of Standard Chartered, but the market’s response to wider considerations provided the week’s main feature. Press comment on sterling’s likely decline in'the wake of the continuing weakness in crude-oil prices saw sterling ease more than one baste point in trade-weighted terms on Monday, Government bonds almost two points, and equities nearly 30 points on the FTSE 100 index.

In following sessions stocks recovered some of the early lost ground helped by U.S. dollar weakness. A steadier crude-oil price with Wall Street’s resistance to a string of recent declines also assisted market sentiment, dealers said. However, equities again met selling pressure, at the end of the week as crude prices faltered and sterling fell. The FT 30 share index closed 41.9 points down

1295.4, and the FTSE 100 index ended 42 points down at 1584.4.

Standard Chartered ended 31p down at 744 after the hostile bidder, Lloyds Bank (3p down at 419), failed to win control of the company, achieving a stake of just over 44 per cent at the close of the offer.

Sir Yue-Kong Pao had acquired a total stake of 14.9 per cent in Standard’s defence, before the bid deadline. Elsewhere in the banking sector Barclays fell lOp to 519 and Natwest 2p to 517 while Midland rose lOp to 559.

Among leading companies to announce results BET closed 13p firmer at 453 after full year pre-tax profits of E124.6M, against £98.2M previously, while the Rank Organisation closed 3p easier at 507 after its half-year pre-tax profits of £70.2M, versus £62.8M.

In the leading issues, ICI fell 7p to 989, Glaxo 27p to 963, Plessey 12p to 216, Beecham 24p to 411, Hawker Siddeley 18p to 531, Jaguar 27p to 521, Thorn EMI 23p to 454 and GKN lOp to 347.

Government bonds ended the week with net falls ranging to more than two points In the longer dated issues after making up some lost ground mid-week on the back of firmer sterling and a higher U.S. bond market However, the market came under renewed downward pressure on sterling’s decline late in the week.

As a result of the early softness of the market, -the

£BOOM 8% 2007 tap stock with a minimum tender price of £94.50 per cent, announced on Friday, June 11, was undersubscribed.

In mixed stores, Dixons closed 4p up at 334 p after announcing a 97 per cent increase In full year profits of £78.1 M, compared with £39.6M.

Boots ended the week a penny higher at 243 after it said the company’s world sales had increased 7.8 per cent In the first quarter to June 30, which would have been 10.1 per cent but for adverse currency movements. Gold shares, fell about SUS 3 In the heavy-weight issues, such as Randfonteln at 58. Declines in the cheaper stocks ranged to 38c as in Kloof at 455, mostly because of currency considerations, dealers said. In diamonds, De Beers closed 30c lower at 620.

A selection of closing prices on Friday (sterling).— Ampol 0.88, AliiedLyons 3.23, ANZBank 1.95, BP 5.78, BHP 3.44, Bond 1.28, BAT 3.88, Telecom 1.96, War Loan 38%, Coles 2.13, CRA 2.47, CSR 1.24, Dalgety 2.78, Elders 2.08, FletcherCh 1.46, Glaxo 9.63, ICl(Aust) 1.03, ICI(UK) 9.89, Lloydsßank 4.19, MarksSp 1.98, MIM 0.77, NatAust 2.17, NthßH 0.77, NZI 0.66, P and O 4.95, Plessey 2.16, Prudent 8.52, Reedlnt 10-7/32, RenisonCons 2.47, Reuter'S' 4.80, RTZReg 5.44, RTZBear 5.50, SheUTr 7.90, Thomord. 4.54, TKM 1.61, Transport Dev 1.84, Unilever 17%, West Min 1.36, Westpacßa 1.93, Deßeers SUS6.2O.