Utilities confirm status as a haven in time of trouble

MARKET REPORT

Utilities, regarded as safe havens in times of stress and strain, featured as the rest of the market struggled to come to terms with the turmoil that has erupted in the Far East and more signs US interest rates will be forced higher.

At this time of year electricity and water shares can expect a joyous run as they move into their close season ahead of interim results which start to flow in October.

Many hold investment meetings before becoming subjected to the silence of the close season. Once they can no longer communicate with the market it is tempting for some wheeler-dealers to get stories running about share buy-backs and even takeover bids. The prospect of rich dividend payments is another positive influence.

Yesterday utilities also received the benefit of their solid, unexciting but high-yielding status. Just the investment for what some see as the beginning of unsettled times.

National Power, up 11p at 568p, led the charge. Severn Trent, 5p to 877.5p, and South West Water, 10p to 811.5p, were others higher. So was British Energy with a 5p gain to 171.5p.

Even BG, which could announce a dividend next month together with a pounds 1bn buy-back rose 4.5p to 270p, a peak.

Mobile telephone operators also enjoyed a run. Orange and Vodafone were lifted by the valuation put on German group, E-Plus, as a 30 per cent stake changed hands. Orange dialled a 15p gain to 223p and Vodafone, with 17 per cent of E-Plus, 7.5p to 317p.

Elsewhere the picture was much more subdued with Footsie off 27.9 points at 4,817.5. At one time it was down 60.2.

Again HSBC and Standard Chartered took much of the Pacific flak. Standard fell 47.5p to 826.5p; HSBC lost 40.5p to 1,920p. In two days Standard has fallen 150p; HSBC 191p. Others under the Tiger whip included Foreign & Colonial Pacific, the investment group, off 8p at 142.5p.

Grand Metropolitan and Guinness were depressed by the unsurprising tough stance the Eurocrats have adopted over their proposed pounds 24bn merger. The EU has provided the two drink giants with a list of its objections. Grandmet fell 10p to 566.5p and Guinness 12p to 546.5p. When optimism about the deal was riding high Grandmet reached 625.5p and Guinness 621p.

Schroders, the investment group reporting on Friday, rose 10p to 1,892.5p. Interim profits of around pounds 130m are expected against pounds 115.9m last time.

BTR, the struggling conglomerate, was another in upbeat mood. The arrival of former SmithKline Beecham chief executive Bob Bauman as chairman designate spurred the shares 9.5p to 218p. Mr Bauman's appointment is presumably in response to City pressure for a high-profile industrialist to move in.

Sheriff, a plant hire group, jumped 61p to 330p as much bigger rival Ashstead produced an agreed pounds 39m bid. Ashstead, looking for US acquisitions, was unchanged at 300.5p.

Marling, an industrial textile group, was another in takeover action. The shares rose 6p to 16p following an agreed pounds 31m offer from a Swedish group, Autoliv.

Hanover International, the hotel chain, fell 4.5p to 128p on the takeover that-never-was. The company said an approach had materialised which had not led to an offer and no talks were taking place. The potential bidder is thought to be Jarvis Hotels.

Still awaiting the signalled bid Boosey & Hawkes added 40p to 1,035p. TLG, the old Thorn Lighting, brightened 3p to 106.5p as shareholderWassall conglomerate was said to be preparing to strike.

On-Demand Information, an online publisher, fell 2p to 8p; last year the shares were 217.5p. It said it would not hit its target of breaking even next year and chairman founder and majority shareholder Graham Poulter is to quit. The company may seek a bid.

Selector, an Israeli company lost 10.5p to 49.5p. It was floated last year at 66p. A profit warning did the damage. Its FOB-stop shut-off valve has been delayed. The device is aimed at saving pub landlords 1.5 litres of wasted beer when kegs are changed.

Photobition, supplying photographic and printing services, hardened 25p to 662.5p, a peak. The shares have come up from 293.5p since November. The group has acquired graphics business Scanachrome for up to pounds 3m.

Chairman Eddie Marchbanks said current year sales were running 40 per cent higher and margins were "significantly better".