Market Report: American investors dial Vodafone's number

AMERICAN investors are ringing into Vodafone, the mobile telephone group. They have lifted their ADR interest, held through the Bank of New York, to a peak 20.57 per cent and are thought to be keen to add to their shareholdings.

When Vodafone demerged from Racal Electronics in September 1991, the US involvement for a time remained static at 17 per cent. It had drifted to 16.5 per cent by November last year but has since steadily increased.

Mobile telephones are regarded as one of the more glamorous investment areas in the US and the re- awakening of transatlantic interest in Vodafone is not surprising.

But there is still a long way to go before it reaches the level of adoration experienced by Racal when it controlled Vodafone. At one time the US shareholding topped 27 per cent. Now, stripped of its cellular radio business and regarded as a more mundane electronics group, Racal's US interest has fallen to less than 3 per cent.

Micro Focus, the computer group, is another suffering a US fall- out. ADRs now represent 24.57 per cent, down 268,441 shares. Not so long ago they topped 30 per cent.

Vodafone shares were little changed at 551p; Racal gained 4p to 226p and Micro lost 48p to 2,220p.

The rest of the stock market lost early buoyancy and the FT-SE 100 index, at one time up 13.8, settled for a 4.2 gain at 2,907.6. The FT-SE 250 index shaded 0.6 to 3,217.9.

The success of the Zeneca rights issue and the persistent aroma of lower interest charges were the prime influences. A weak New York opening caused some of the interest to evaporate.

Zeneca rose 8p to 626p. Barclays de Zoete Wedd and SG Warburg comfortably placed the rump (five times oversubscribed) at 612p. Glaxo Holdings was worried by a Goldman Sachs downgrading, falling 10.5p to 587.5p.

The Rothmans International excitement erupted as the market was closing. In hectic trading Rothmans surged 55p to 720p and Dunhill Holdings 62p to 405p.

Cable and Wireless, with better- than-expected results, helped sentiment, improving 23p to 777p. First Leisure Corporation's conversion to bingo was seen as the main influence behind a 12p advance to 778p by Rank Organisation, the UK's biggest bingo operator. FLC shaded 1p to 364p.

Reuters, reflecting the progress of its 2000-2 dealing system and a buy suggestion from Warburg, rose 36p to 1,383p.

Spring Ram, the bathroom and kitchen group, was hit by a sudden shower of selling, falling 8p to 61p. Several large lines of stock were aggressively sold.

Smith New Court had Redland and RMC moving in opposite directions. The securities house suggested switching out of RMC, down 11p to 750p, into Redland, up 11p at 456p. SNC, with results due, gained 4p to 248p.

Vickers, on confirmation of its Oman order, jumped 9p to 149p. An export order, a pounds 25m Indonesian deal, prompted Whessoe into a 13p gain to 337p.

British Steel continued to enjoy the benefits of second thoughts following its pounds 149m loss. The shares rose 2.75p to 101.5p.

The Grand Metropolitan investment presentation was well anticipated. The shares, strong in the past few days, ended 1p lower at 425p.

The market's current takeover favourites lost their appeal. Fisons sacrificed an early gain to close unchanged at 177p. United Biscuits crumbled 5.5p to 402.5p.

Ratners, firm recently, ran into selling, falling 3.5p to 32.5p. But Budgens, the supermarket chain, rose 4p to 45p on speculation about the intentions of its 26.3 per cent shareholder, the German REWE group.

Kwik Save's seemingly unstoppable retreat was arrested by Nikko Securities. A buy recommendation lifted the shares 4p to 725p. They have come down from 843p.

In the year to the end of August Nikko is looking for profits up pounds 20m to pounds 130.5m and then to pounds 152m. Kwik Save has been hit by competition worries and its removal from the 100 index.

The discount group could, the securities house argues, double its size in the next four to five years. And it 'is dictating the prices rather than following' its rivals.

Dairy Farm, the Hong Kong group, has 28.06 per cent. Some expect it to bid for control. Nikko is content to talk of the stake going up to 29.9 per cent.

James Wilkes, the engineer, advanced 4p to 85p as Suter, the mini- conglomerate threatening to bid, nudged its stake to 17.35 per cent, buying 63,000 shares. Sunleigh, which now concentrates on leisure equipment, held at 9p as Babcock International said it had sold 800,000 shares, reducing its stake to 8.7 per cent. At one time Babcock had more than 20 per cent.

Crabtree Holdings made a firm debut. The shares closed at 204p against a 178p suspension price when, as Somerset Trust, the company agreed to the reverse takeover of the printing press specialist. Somerset itself emerged from a charity trust, Children's Medical.

Alphameric, a computer group, held at 41p. An investment presentation is likely soon.

Shares failed to hold their best levels. The FT-SE 100 index ended 4.2 points higher at 2,907.6 and the FT-SE 250 index shaded 0.6 to 3,217.9. Turnover was 588.1 million shares with 28,856 bargains. The account ends on 2 July with settlement on 12 July. Gilts were mixed.

After a long period of underperformance, the 'A' shares of Whitbread are regarded as offering the best value in the brewery sector, by Credit Lyonnais Laing. Julie Bower, an analyst, says the shares at 497p ignore its strong retail presence through Pizza Hut and Thresher. As a national, but second-tier, brewer Whitbread is regarded as well-placed to force the pace of change in the industry.

Shares of Silentnight Holdings, the family-controlled bedding group, rose 7p to 317p after Bill Davies, chairman, told shareholders that profits were running ahead of last year. The company, Europe's biggest bed maker, achieved profits of just over pounds 12m last time. Mr Davies' optimism prompted the Manchester stockbroker John Siddall to lift its forecast for this year from pounds 13.8m to pounds 14.7m.