LONDON OPEC meeting failure takes market lower

Press, 22 December 1986, Page 37

LONDON OPEC meeting failure takes market lower

By Phil Smith of Reuters (through NZPA) London Equities on the London market ended the second and final week of the account mixed on Friday but with an easier bias after five quiet sessions. Dealers said trading was slack because of seasonal considerations, and they noted little buying for the new three-week account. The market was buoyed in the early part of the week by stronger sterling and hopes that the meeting in Geneva of the Organisation of Petroleum Exporting Countries could make some agreement to cut production and so raise prices. The FTSE 100 share index was up 2.4 points at 1632.2 while the FT 30 lost a net 8.3 points at 1272.1. Dealers noted, however, that the market tended lower in the latter part of the week as early optimism about the OPEC faded when Iraq refused to accept proposed OPEC output quotas. North Sea Brent crude traded over SUS 16 a barrel last week for the first time since February. Oil shares ended generally firmer, with BP up 14p at 701 and Shell 18p better at 972. Enterprise Oil jumped 21p to 178 on the news that it will merge with ICl’s oil and gas interests. The merger will give ICI a 25 per cent stake in Enterprise’s enlarged equity, ICl’s interests being exchanged for 71.9 IM new Enterprise ordinary shares. Elsewhere in the oil sector I.C. Gas firmed 38p to 594 after interim profits of £18.48M. A £7SOM offer for I.C. Gas from Gulf Resources recently lapsed after being referred to the Monopolies Commission. Glaxo was a feature during the week, gaining a net 90p to 1043. The shares moved ahead on hopes of higher profits from a new drug to treat schizophrenia, announced on Friday. Fisons added 18p to 534 also on new

drug hopes and on cheap buying after recent weakness. Grand Metropolitan fell 23p to 451 on fading bid hopes and despite better-than-expected full-year profits of £386.1M. Unilever shed a net 58p to 2135 on light but persistent profit-taking in the wake of the recent strong gain, while the bid target, Pilkington, added 28p to 652 on hopes of a higher offer from BTR, down lOp at 264. BTR said on Wednesday that it controlled 3.87 per cent of Pilkington’s equity and was extending its offer to January 24. GEC was Ip up at 169 despite news it had lost the British Government air-defence contract for its Nimrod system to the Boeing Company. Elsewhere, Plessey gained 3p to 175, but Racal lost 2p to 174 despite the prospect of relatively large orders from Boeing for parts of the new air-defence system. Guinness, fell a further 14p to 284 after it disclosed that one of its wholly owned subsidiaries had joined a limited partnership managed by the disgraced American arbitrageur, Ivan Boesky. Guinness is the subject of an investigation into its shareholder membership by the U.K. Department of Trade. Dealers noted little response to news that the British Government will investigate unspecified insider activities among public servants. Stores showed little reaction to a provisional 2.3 c rise in November. retail sales or a Confederation of British Industry survey that forecast higher Christmas earnings. Great Universal Stores lost lOp to 1009 on profittaking after recent firmness, while Woolworth added a net lOp to 665. Banks were slightly firmer on balance, with Barclays up 8p at 496 and National Westminster 2p to the good at 520. Insurances eased with Royal down 9p at 835 and

General Accident 19p softer at 795. Composites fell sharply, but quickly recovered, on rumours that another Canadian province will nationalise motor insurance companies, but many dealers were sceptical of such a move. Brokers Bradstock gained 7p to 403 after annuals but C. E. Heath lost 27p to 433 after some key members of staff resigned. Government bonds were little changed on the week after five relatively quiet sessions with the benchmark Treasury 13% per cent stock due 2004/ 2008 3/32 points lower at 122 sterling. Gilts tended firmer after news of a much lower than expected U.K. November Public Sector Borrowing Requirement (PSBR) of £S6M which compared with market forecasts of as much as £1 billion. However, disappointing money supply data on Thursday eroded the gains. Sterling M 3 rose a higher than anticipated 1% per cent in November while bank lending showed almost twice the forecast increase of £3.9 billion sterling. Gold shares were generally firmer in line with the rise in the bullion price, which gained more than SUS 3 on the week to $U5394.80 an ounce at Friday afternoon’s London fixing. Randfontein rose a net SUS 3 to $9l and Kloof 15c to 763. Closing prices on the London Stock ExChange of a range of stocks, in pounds: Ampol, 1.24; Allied Lyons, 3.07; ANZ Bank, 2.68; 8.P., 40%; BHP, 4.02; Bond, 1.14; BAT, 4.62; Telecom, 2.06; War Loan, 34 15/32; Charterhall, 0.33; Coles, 2.79; CRA, 3.41; CSR, 1.52; Dalgety, 2.68; Elders, 2.02; Fletcher, 2.07; Glaxo, 10.40; Hanson Trust, 1.85; ICI (Aust), 1.41; ICI (UK), 10.72; Lloyds Bank, 4.35; Marks and Sp, 1.72; MIM, 1.11; Nat Aust, 2.76; NthßH, 1.21; NZI, 0.84; .Plessey, 1.76; Prudential Corp, 8.00; Reed, 3.03; Reuter B, 5.63; RTZ Reg, 6.55; RTZ Bear, 6.72; Shell Tr, 9.17; Thorn Ord., 4.68; TKM, 1.53; Transport Dev, 347.69; Unilever, 21.56; Western Min, 2.49; Westpac, 2.42; De Beers, 5U57.63.