LONDON Equities close at record highs

Press, 12 January 1987, Page 26

LONDON Equities close at record highs

PA London London equities ended the final week of the long account sharply higher with the surge in prices taking the Financial Times/Stock Exchange 100 share index to record highs. Shares started the rally mid-week on strong institutional and foreign demand, spurred by the new highs reached on Wall Street Dealers said investment funds are normally highly liquid at this time of the year, and a traditional New Year building up of positions by institutional investors fuelled the rally. The FTSE 100 share index ended 71.1 points up at an all-time high of 1752.3. The FT 30 share index ended 66.2 points higher at 1386.4 compared with its all time high of 1432.2 reached on April 3 last year. The pace of buying slackened towards the end of the week as some operators started to take profits, but the underlying trend remained firm. On Wall Street the Dow Jones industrial average moved above 2000 for the first time in the market's history.

Dealers said prices will probably ease back next week as the record gains

are consolidated with many in the market believing that U.K. and UJS. securities have moved too high too quickly.

There were few features in the absence of any major corporate news, and prices rose across a broad front

The pharmaceutical sector posted impressive gains after brokers’ recommendations for some issues and on hopes of higher profits from new drags. Fisons jumped 50p to 580 and Glaxo 78p to 1125, while Reckitt and Colman added 52p to 918. Elsewhere among the FTSE 100 constituent stocks, ICI rose lOlp to 1160 and Hawker Siddeley 43p to 498, while Blue Circle gained 47p to 725 — helped by speculation that the Adelaide Steamship Company may increase its stake in the company. Jaguar rose 55p to 590 after news of higher 1986 US car sales. Guinness, 9p higher at 309, has asked for the return of £7.6 million held by merchant bank Ansbacher. The funds were put on deposit at the time of Guinness’ successful bid for Distillers earlier this year. Guinness also said it had brought forward a meeting of its full board to January 14

to discuss the U.K. Government investigation into its affairs.

Pilkington lost 31p to 627 against the general trend on news that the U.K. Take-over panel had extended BTR’s billion bid for the company. BTR firmed a net 19p to 289.

Allied lyons rose 25p to 348 after a £48.5 million acquisition from Grand Metropolitan, up just Ip at 458.

Merchant banks were firm on bid speculation, with Hill Samuel up 61p at 461 after NZI Corp said it now holds close to five per cent of the company. Elsewhere, Morgan Grenfell rose 41p to 404 and Kleinwort Benson 80p to 597, also on speculative demand.

Mercantile House jumped 96p to 394 on bid hopes after Crown of Canada and FAI Insurances of Australia disclosed substantial holdings. Discount houses were firm ahead of their dividend season, with Union Discount up 30p at .708.

Gearing banks tended lower against the general trend on Third World debt worries and on the renewed slump on the perpetual floating rate note (FRN) eurobond market Dealers noted that some

of the major UJC clearing banks have in the past issued large perpetual FRNs. Midland lost a net 12p to 593 but Barclays rose 2p to 517 on late buying.

Insurances rallied in line with the general market trend with Guardian Royal 41p higher at 830 and Royal 29p to the good at 878. Oils also moved ahead as crude prices held at just over SUSIB a barrel, with BP 31p harder at 754 and Shell 38p firmer at 1023. Gold shares posted gains as the bullion price hovered a little over SUS4OO an ounce. Randfontein rose 5U53.50 to $96 and Hartles 27c to 550.

Mining financial Angles rose $% to $15% while diamond share De Beers jumped 80c to 840.

Government bonds showed a firmer bias but trading was relatively quiet throughout the week. The benchmark Treasury 13% per cent stock due 2004/2008 was 5/16 point up at £127% per cent British Airways said in its preliminary prospectus for the privatisation of the company that it expected profits in the year to March 1987 to fall to £145 million from £lB3 million

in 1985/86. The sale will open on January 27, and analysts expect the 7204 million shares to be priced around 120 p to 130 p each. Australian stocks listed in London ended the week with gains in almost every area. Prices remained dose to the record levels set in Friday's session in Australia as stock markets around the world reported all-time highs. - Selected industrials and resource stocks were the strongest while falls were limited. Closing prices (in pounds) of a sdection of issues were:— Ampol, 142; AUMLyoas, 3.46; ANZ, 2-67; BP, 733; BHP. 4.17; Bond Cora, 129; BAT. 4.95; BritTelecMk, 214' Warinan, 35-15/18; Cfexrtertsall. 0.34; ColoGJ., ZT)\ CRA. 3.41; CSR, IBklMpty, 3.02: EMersDG, 222; Fletcher. 205; Glaxo, 1142; HansoaTrust, 202; IQ (Ant), 1.54; Id (UK), 255; Ltoydsßank, 4.52; Mart: sand Spencer, 1-94; Mlii, 1.18; NatA&stßank, 267; NHH, LN; NZlCbrp, 044; PandO. 5.«; Plessey, 1.89; Prudential, 8.46; Reedlni, 3.30; Renisoo, 4.41; Reuters’, 5.73; RTZ reg 7A7 and bear. 739; SbeUTraasport, 1045; ThoraOrd, 5.0?, TKM, 1.60; Unilever, 2200; West Mining, 268; Westpecß, 237; Deßeers (quoted in SUS), 8.40.