BSkyB steals the show ahead of Pearson's pull-out

MARKET REPORT

BSkyB, the satellite television group dominated by Rupert Murdoch, stole the show as the stock market prepared for a substantial placing by Pearson, the banking to media group.

It is no secret that Pearson has lost interest in an investment in a company in which it has little, if any, influence.

The pounds 500m it is likely to realise from a 9.7 per cent BSkyB sale will be regarded as useful ammunition in its bid to develop its worldwide media operations under the direction of its TV chief, Greg Dyke.

BSkyB is due to announce year's figures today. The Pearson pull-out is thought likely to accompany the announcement, which is expected to show profits nudging pounds 160m against pounds 92.9m last time.

Since arriving on the market at 256p in December, BSkyB shares have overcome considerable scepticism among some securities houses and yesterday rose 5.5p to 342.5p. Pearson eased 4p to 633p. Granada, another BSkyB minority shareholder, gained 12p to 649p.

The market decided the latest Whitehall statistics lowered the chances of higher interest rates, and with the US dollar's recent strength encouraging international shares, the FT-SE 100 index shrugged off profit-taking to close 20.7 points higher at 3,465.1 in rather more active trading than has been seen in the past few weeks.

Anglian Water was the busiest blue chip as, through the stockbroker Cazenove, it completed a share buy-back, picking up 29.7 million shares (10 per cent) at 548p. Alan Smith, the group's managing director, appeared to exercise options to net a pounds 164,000 profit. The shares fell 2p to 546p. Southern Water, thought to be likely to follow Anglia's example, rose 20p to 678p.

Stockbroker reports caused the occasional stir. James Capel laid low David S Smith, the packaging group. It cut its forecast from pounds 135m to pounds 117m, reducing the shares 6p to 608p.

De La Rue, the security printing group, gained 6p to 893p as Kleinwort Benson made positive comments.

James Capel and the prospect of a US roadshow tickled Takare, the nursing homes group, 5p better at 202p, and Kleinwort continued to push Williams Holdings higher, up 8p at 317. Eurotherm, the electronics group, gained 10p to 485p on Barclays de Zoete Wedd support. Smith New Court enthusiasm lifted Reuters 12p to 548p. Henderson Crosthwaite's recommendation for Argyll was responsible for a further 7p gain to 349p

A rumoured buy recommendation from ABN Amro Hoare Govett powered GEC 6p ahead to 306p.

Grand Metropolitan, continuing its Pillsbury presentations in Scotland, rose 12.5p to 412.5p with the strength of the US dollar adding to the exuberance.

Others up on dollar considerations included BAT Industries, 14p to 512p, Cable and Wireless 16p to 424p and Hanson 4p at 219.5p.

Oils should have responded to the dollar's strength but worries that the Iraqi restrictions could soon end left British Petroleum 9p lower at 471p and Shell 9.5p off at 727.5p.

Inchcape continued its recuperation as the Japanese yen weakened, gaining a further 8.5p to 346p.

Northern Electric rose 19p to 914p as shareholders approved the benefits package originally produced to fend off the unwanted Trafalgar House bid. Panmure Gordon believes the shares should now enjoy a price of around 950p.

WPP, the advertising group, enjoyed Goldman Sachs support, up 7p to 145p.

The Telegraph responded to poor interim figures with a 20p fall to 393p and Parkside International, a packaging and paper group, fell 38p to 50p on a profits warning.

Alpha Airports' US setback continued to weigh on the shares, sending them 4p lower to 138p against last year's 140p flotation price.

McDonnell Information Systems, the struggling computer group, managed a 5.5p gain to 68p as the new management team picked up 63,000 shares at 67p.

Blagg, the builders' merchant where the ex-Swiss Bank Corporation executive Chris Akers has moved in, gained a further 1.25p to 16p. Owen Oyston, the Manchester entrepreneur, has snapped up a 5 per cent stake.

Birkdale, the marketing group that attracted ex-Rover man Kevin Morley, moved ahead another 1p to 7.75p.

VideoLogic rose 2p to 36p. There are hopes that some of the Microsoft magic will rub off on the shares following the launch later this month of the Windows 95 system.

Canadian Pizza flopped 10p to 95p awaiting bid developments. Steel Burrill Jones, the insurance broker in the bid frame, dropped 5p to 99p.

Bullers, the media to giftware group, succumbed 1p to 2p as Jim Slater and associates sold shares.

TAKING STOCK

r Upton & Southern, the retail group hit by the failure of its Reject Shop subsidiary, is likely to produce details of its reshaping next week. A fund-raising exercise, probably pounds 1.5m in convertible preference shares, is likely. New chairman Ron Trenter, who used to run the Texas DIY chain, is thought to have persuaded the group's bankers into a favourable deal and reduced the company's exposure to the Reject Shop subsidiary, which went into receivership. The shares held at 1.75p.

r CRP Leisure, suspended at 6p, has run into problems over its planned move into property and there are signs it will be unable to complete its takeover of the FGL Investments property business. The FGL deal should have gone through last month. It is thought CRP has now opened talks with another property group.