London strengthens on GEC success

Press, 11 September 1989, Page 30

London strengthens on GEC success

NZPA-Reuter London London shares were mixed to firmer in active Friday (early Saturday N.Z. time) late trade as a weaker Wall Street took it off its early highs, but the market was taking strength from GEC Siemens’ success in its £2 billion (SNZS.3B) bid for Plessey. After winning shareholder approval for the bid for Plessey GEC Siemens claimed cacceptances for over 50 per cent of the electronics group. It then found willing institutional sellers when it entered the market on Friday afternoon. Dealers, said the institutions had accepted GEC’s victory and were selling up now to get the cash as quickly as possible. The market is now hoping some of the cash pile will find its way back into the sharemarket and this was helping to insulate it from Wall Street’s poor performance. The end of the bitter 10-month long bid battle for Plessey means GEC has removed one of its biggest defence competitors in Britain and established a solid base for expansion into Europe after 1992. At the close GEC was 2p firmer at 267 and Plessey Ip off at 267. The market’s ability to recover from Wednesday’s sharp losses and stabilise above the key FTSE 2400 level was thought to be encouraging institutions to allocate more cash to equities. Sectors most favoured were the oils, brewers, insurances and banks. At the close the FTSE 100 was 8 points firmer at 2333.9 on an above average turnover of 791.3 million shares. Gilts lost early gains to end % point easier.

Stocks rose to the day’s highs in active late trading on Thursday, recovering as Wall Street staged a modest rally. “The market’s shown its resilience once again. If it can recover so swiftly and close above the key FTSE 2400 level again, then it would suggest there’s more than just bid speculation holding it up,” said a trader.

By the close the FTSE 100 was 25.1 points higher at 2415.9 on a moderate turnover of 508.9 million shares. Gilts edged higher, helped by the pound’s stability but upward potential remains limited, dealers said.

Share prices fell in late Wednesday afternoon trade, taking the FTSE 100 index back below the 2400 level it breached on Friday.

Dealers said shares tracked Wall Street, where profit-taking from that market’s record highs and heavy futuresrelated program selling drove blue chips lower. Rumours of a £5OO million rights issue added to bearishness.

The rights issue rumours and persistent bid talk helped boost the market to its new post-crash highs, but

these came to naught, a dealer said. The FTSE 100 closed 35.2 points off at 2390.8 on volume of 540.1 million shares. On Tuesday share prices were generally lower but drifted upwards in late afternoon trade as dealers awaited more company results and economic news before deciding on a direction. The market was hoping for signs in the hectic half-year reporting season that began last week of gradual slowing in the economy without too much damage to company prospects, dealers said. The FTSE 1000 index closed 6.8 points up at a high for the day of 2426.0, with 465.1 million shares traded. The absence of major U.K. economic statistics was one factor behind the indecisive mood, dealers said. Shares were mostly firmer in late Monday trade, but the U.S. market holiday meant business was thin and directionless, and scattered‘profit-taking eased stocks from their highs. Interest was selective, as the market braced itself for a rash of interim corporate results. By the close the FTSE 100 was 11.7 points higher at 2419.2 on a reasonable turnover of 369.9 million shares. Gilts were little changed in becalmed trading. Closing prices on Friday (sterling) included.— AMEC 4.60, ASDAGrp 2.02, Allied Lyons 5.64, BP 3.18, BAA 3.53, BATord 8.10, BTR 4.72, Barclays 5.45, Bechams 6.43, Bicc 5.50, Blue Arrow 1.10, BlueCircleCmt 2.45, BocGrp 5.34, Boots 3.13, Bowater 5.02, Brit Aerospace 7.03, Brit Arrow 1.22, Brit Airways 2.11, Brit Gas 2.10, BritTelecom 2.75, BurmahOil 6.37, Cable Wire 6.08, CadburySchw 4.05, Comm Union 4.39, Courtaulds 3.87, DeLaßue 3.60, Fisons 3.49, Gateway 2.37, Gen Accident 10.68, GEC 2.68, Gestetner 2.78, GlaxoHldgs 15.97, GranadaGrp 3.52, Grand Met 6.35, Guardianßoyal 2.29, GKNett 4.57, Hanson Trust 2.30, HawkerSiddeley 7.65, ICI 13.02, Inchcape 3.03, Jaguar 4.16, JohnsonMatthey 4.14, LadbrokeGrp 3.43, Land Sec 5.94, LegalGeneral 3.73, Lloydsßank 4.17, Lucaslnd 6.77, Marks Spencer 2.22, Metalßox 2.19, MidlandBank 3.80, NatWestßank 3.45, PandO 6.87, Pilkington 2.61, Prudential Corp 2.14, RTZ 5.89, RacalElect 2.37, RankOrg 9.20, HovisMcDougall 4.67, ReckittColman 12.26, Reedlntl 4.49, ReutersHldgs 9.73, Rollsßoyce 2.00, Rothmanslnt 6.58, RoyalßankScotland 1.82, RoyalDutch 0.43, Royallnsurance 4.77, SaatchiandSaatchi 3.17, Sainsbury 2.83, ScottishNewcastie 3.82, Sears 1.26, ShellTr 4.53, Smith Nephew 1.38, Standardßank 5.30, Std Cables 3.76, Sun Alliance 3.17, Tate Lyle 2.85, Taylor Woodrow 3.00, Tesco 2.11, ThornEMl 8.89, THForte 3.52, Turner Newell 2.37, Ultramar 3.51, Unilever 6.58, Utdßiscuits 4.02, Vickersord 2.41, WaterfordGlass 0.76. AUSTRALIA, NZ ANZBank 2.53, BellGrp 0.26, BHP 5.03, Bond Corp 0.21, BIL 0.95, CRA 5.93, CSR 2.56, Charterhall 0.23, ColesMyer 4.42, Dalgety 4.22, ElderslXL 1.46, FCL 2.09, IClAust 3.16, MIM 1.30, NatAustßank 3.11, Newslntl 3.90, NthßH 1.56, RenisonGold 4.38, TKM 1.27, TransportDev 2.76, WMC 3.28, Wespac 2.56.