Market Report: Analysts talk up Vodafone to new peak as FTSE falls

INVESTORS DIALLED into Vodafone, sending the shares surging to a new peak. An upbeat analyst meeting was responsible. But such was the intensity of activity that wires were again buzzing with talk of corporate action.

The mobile phone group held investment meetings on Wednesday prompting a 43.5p advance. Yesterday the shares raced ahead 43p to 903p. It seemed that every telecom analyst not on holiday was advocating buying the shares.

Vodafone, it appeared, told a tale of new subscribers flowing in with margins expanding. There were also hints it was looking for acquisitions.

However Vodafone itself represents an attractive target. It has for long been seen as a bid candidate and is regarded as becoming even more vulnerable as the globalisation of the telecom industry gathers pace.

Orange, up 15p to 789p, enjoyed a Vodafone spin off. And Securicor, owner of 40 per cent of the Cellnet mobile phone operation, put on 22p to 530p. BT, which has the rest of Cellnet, missed the party, shading 1p to 848p.

Computer shares were the other stars. With the Micro Focus results still offering inspiration Misys rose 95p to 2,825p; Sage 55p to 1,487.5p and Sema 10p to 688p. Micro Focus, however, fell 15p to 465p.

Bid speculation returned to bolster financials. Halifax to shoot for Norwich Union was one; Lloyds TSB to descend on an unsuspecting group, anything from Halifax to the Prudential Corporation, was another.

Norwich ended 9p higher at 468p; Halifax, which has had a relentlessly monotonous time since it arrived on the stock market last year, fell 20p to 704p.

Lloyds, which has made no secret of its desire to get another major deal under its corporate belt and is piling up its cash resources, fell 18.5p to 776.5p. The Pru jumped 22p to 821p.

EMI, the showbiz group, was also given another takeover spin. The shares rose 24p to 523p on stories Bertlesmann, the German group which has talked to EMI in the past, was preparing to strike. Earlier this year EMI was seen as a target for Seagram, the Canadian group. The shares peaked at 738.5p two years ago.

Footsie's four-day winning streak came to an end with a 26.9 points fall to 5,667.4. Supporting shares gave ground. The worsening situation in Russia with talk of a deepening banking crisis, combined with an uncertain New York, opening to remove the market's shine.

The 39 per cent Nedlloyd profits fall lowered P&O 30.5p to 814.5p with ABN Amro planning to cut profits estimates and saying sell; De La Rue lost 9.5p to 244.5p on the arrival of Ian Much, ex T&N, as chief executive.

House of Fraser was ruffled by a stream of smallish sell orders, tumbling 8.5p to 106.5p, a new low. The shares were floated at 180p four years ago. They peaked at 228.5p last year but have been hit by declining profits and worries its department stores are suffering in the retail recession. The company said rumours of a profits warning were wide of the mark. Selfridges lost 7p to 234p.

Beers remained flat following the latest round of downgradings. Scottish & Newcastle fell 17p to 792p and Whitbread 9p to 829p. British-Borneo jumped 21.5p to 235p following an oil strike off the Shetland Islands. The well is operated by Conoco on behalf of Atlantic Richfield, Ranger Oil and British-Borneo which was above 500p last year.

GKN, the engineer, firmed 22p to 734p after its long running $390m US lawsuit was dismissed by the Court of Appeal. The ending of the legal claim prompted some investment houses, including Credit Lyonnais, to put out buy signals.

Imperial Chemical Industries slipped 4p to 686p although BT Alex.Brown said the market was being far too cautious and suggested a price nearer 900p.

Mid States, which distributes car parts in the US, firmed 1.5p to 21p. The company is back in profit at the half-way stage, producing pounds 1.2m against a pounds 6.5m loss. Dermot Desmond, the Irish millionaire who owns London City Airport, is a significant shareholder.

Electronic Retail jumped 55p to 255p; it has won an order for its revolutionary ShelfNet shelf labelling system from Waremart. It will be installed in four stores in California. The 27-strong Waremart chain has already tested the ER system at one of its Californian stores.

Victory Corporation managed to improve 1.5p to 12.5p as Richard Branson lifted his shareholding to 54.69 per cent, buying 11 million shares at 10p.

Torex, the computer group, gained 9p to 127.5p after abandoning its bid for Radius and Vardon gained 12p to 172.5p following its health club buy and figures.

Vymura, the wall covering group where millionaire businessman Trevor Hemmings has built a significant stake, lost 25p to 110p after a profits warning.

Aston Villa scored a 22.5p gain to 565p after selling Dwight Yorke and David Unsworth for pounds 15m.

SEAQ VOLUME: 757m

SEAQ TRADES: 47,157

GILTS INDEX: n/a

KENWOOD APPLIANCES, the mixer and toaster group, looks in play. Rival Pifco has made no secret of its bid ambitions and now Glen Dimplex, the Irish electric group, has emerged as a 3.55 per cent shareholder. Kenwood has struggled for much of the time since it came to market at 285p six years ago. At one time the shares topped 380p. They are 121p. A key 17 per cent stake is held by the UK Active Fund, the aggressive group run by Brian Myerson and Julian Treger.

PROPERTY PARTNERSHIP rose 15p to 252.5p. It is selling its properties and retreating from hotels and opted for liquidation; shareholders are expected to get 296p a share, including a 35p interim dividend.