City Talk: Catch-up is the reason for Perpetual's motion

THE astonishing rise in shares of Perpetual, the unit trust business run by star fund manager Martin Arbib, has been much remarked on. Rumours are circulating that Mr Arbib may be on the point of selling his 40 per cent family stake.

At pounds 33, Perpetual shares have risen 55 per cent in four months. Certainly, there seems no rational reason for investors to have pushed the price so high. So could Mr Arbib be about to sell out, possibly to a wealthy suitor in the shape of an US bank?

The real reason may be slightly more mundane. Part of the rise merely mirrors what is going on among other second-line financial stocks: a game of catch-up with their more highly rated blue-chip companions. And fund management - a business where there are few quoted exponents - has been further ignited by the hefty price paid by Merrill Lynch for Mercury Asset Management.

Shares in Perpetual, if not exactly as rare as hen's teeth, are difficult to get hold of. Usually the slightest buying interest is enough to send them shooting upwards.

Orange has thrown down a challenge to its rival mobile phone operators that will be hard for them to match. Results were broadly in line with expectations, but it was the plans it has revealed for the future that take the breath away. This really is the stuff of dreams, certainly for the geeks among us: full Internet access with colour graphics, over your mobile, within the next 12 to 15 months.

At the end of the year comes the ability to roam on two wavebands, with the most extensive international connections. And the arrival of third- generation technology for its handsets in 2000, says Orange, will mean the end of those pesky connections where you suddenly find yourself cut off in mid sentence - especially irritating when on a train. As if all that were not enough, Orange announced it had signed up a deal with Iridium, a consortium sponsored by US telecoms giant Motorola. Iridium plans to offer its service in September, and users will require a special handset, not much bigger than the existing one, if probably a lot more expensive. But it will mean connectivity to anywhere on earth.

With its network investment Orange will have capacity to spare. The result? It acquires that most coveted status, the lowest marginal cost operator. The shares have been doing well, but these developments, if they pay off, could see them shooting off into the stratosphere.

Carlton Communications, the independent television company, has had its problems, already signalled in a dismal share performance over the past 12 months. The reasons for this - some exposure to South-east Asia, declining rebates from Channel 4 and the enormous cost of investment in British Digital Broadcasting - are well known. With the shares still in the doldrums, some brave souls in the City believe they are due for an upturn. Panmure Gordon calculates that Carlton is worth closer to 566p a share against a current price of 464p. It believes that while profits will remain flat or decline over the next two years, the shares are worth a lot more: they are trading on a 30 per cent discount to the market.