Market Report: White Paper sends power surge through generators

THE generators enjoyed a surge of power yesterday as Michael Heseltine's new coal deal was seen as strengthening their position in the changing and confusing fuel industry.

National Power jumped 14p to 336p; PowerGen, with the added spur of an early dividend payment, 16p to 342p. Even the Scottish power players, which have been seen as somewhat removed from the intensity of the British Coal debate, made progress. Scottish Hydro-Electric was up 4p at 264p and Scottish Power 5p at 244.5p. NP and PG, in two payments, were sold to investors at 175p a share.

It seems Mr Heseltine has failed to win any concession from the power generators. The new coal contracts do not represent any extra coal-buying commitment and plans for gas-fired stations go ahead.

The generators have also been accorded another unexpected bonus - Mr Heseltine is not changing the regulatory framework.

The response from the electricity distributors was, predictably, more muted. Early falls were eliminated, with a few managing to make progress.

The rest of the stock market suffered another unhappy session, although shares recovered from their floor levels. The FT-SE 100 index, at one time down 27.2 points, ended 7.8 lower at 2,852.8.

Trading was heavy with turnover, at 904.3 million, the second-highest of the year. Once again there was a large element of tax trading, with bed-and-breakfast deals again evident.

A clutch of generally disappointing trading statements killed any enthusiasm, with Wellcome slumping 72p to 818p in busy dealing as the market fretted about growth prospects. At least one fund manager was talking the shares down to 500p.

BT bucked the trend. The shares rose 10.5p to 430.5p, a two-day gain of 14.5p.

Trading was brisk. The shares have responded to the latest signals about the sale of the Government's remaining interest. With private investors chasing often the most obscure stocks as they switch out of building societies, the market is convinced that BT3 will be weighed heavily in favour of the small investors.

Although some might suggest a little massaging could be behind the BT strength, most believe it is a sign that institutional investors are strengthening their positions ahead of the flotation. There is also evidence that US investors are piling into the stock.

MB Caradon, the building materials group, dipped to 316p on persistent rumours from Paris that a French investment group was prepared to offer pounds 475.6m for its 25.3 per cent interest in CarnaudMetalbox, the can maker. Such an offer would fall short of the amount MB clearly expected when it put the stake on the market.

The Paris story said that the French conglomerate CGIP, which already has 25.3 per cent of the can maker, had put together a consortium including BNP and Credit Lyonnais, to buy out MB. CarnaudMetalBox shares fell 162p to 2,713p.

Profit warnings took their inevitable toll. Domino Printing slumped 44p to 552p; Dalepack dropped 63p to 201p.

Properties were mixed. Great Portland, seen as a likely rights issue candidate, fell 3p to 164p.

British Airways was another tarred with the cash-call brush. The market is convinced it will need to raise fresh capital to continue its investment programme. After slipping a few coppers the shares ended 0.5p higher at 283.5p.

Talk that Reuters, the information group, intends to buy in its own shares or even hand out a bonus to shareholders left the shares 22p higher at 1,381p. Christie International, the auctioneer, shaded 4p to 170p with an 11 million block seemingly traded at 153p.

The Government's clearance for PowerGen to build a power station at Deeside, North Wales, taking gas from Liverpool Bay, spurred Monument Oil & Gas 1.5p to 44p. But Lasmo, another Liverpool Bay beneficiary, was too weighed down by losses and a dividend cut to respond, falling 5p to 168p.

Betterware, the door-to-door operation, rose 2p to 265p. An investment presentation at Barclays de Zoete Wedd was well-received. The group is on the verge of moving into Spain, building on its successful French venture. The shares were 86p last year.

Ratners, the struggling jeweller, came to life, jumping 2p to 19p with talk of board appointments, including a chief executive. Ticketing Group, the Keith Prowse ticket agency, was the busiest traded share, with Seaq putting volume at 128 million. It is thought that Wembley has again reduced its stake. The price stuck at 2.5p.

Alphameric, the computer group that underwent a financial restructuring last year and has since raised more cash through a share placing, jumped 7.5p to 37p. It should return to profits in the year ending this month and there is talk of a development breakthrough.

SHARES gave ground, with the FT-SE 100 index down 7.8 points to 2,852.8. The FT-SE 250 index lost 24.4 to 3,113.6. Turnover reached 904.3 million shares with 40,083 bargains. The account ends today, with settlement on 5 April. Government stocks drifted lower.

The possibility of another takeover ferment among regional brewers is raised by Credit Lyonnais Laing. Analyst Julie Bower points out that in the rapidly changing drinks industry shares of some quoted regionals are priced well below asset value. She points to Burtonwood Brewery (144p); Eldridge Pope (87p) and Gibbs Mew (183p). But high-flying Joseph Holt (3,038p) is regarded as a sell.

MAI, the advertising and financial group, has again lifted its interest in Intrum Justitia, the Dutch group claiming to be Europe's largest debt-collecting agency. It has picked up 1.5 million shares, taking its stake to 17.43 per cent. The MAI shareholding has doubled in nine months. Bo Goranson, chairman and founder, is the largest shareholder with 31 per cent. Intrim Justitia shares held at 83p.

Seafield, a loss-making property and transport group, has attracted a new shareholder, the revitalised Waterglade International Holdings, which has agreed to buy an 18.48 per cent stake. In 1991 Seafield, a Dublin-based group, lost pounds 22.38m and suffered a further pounds 1.45m loss in the first half of last year. It last made a profit in 1989. Waterglade appears to regard the shares, up 0.5p at 14p, as a recovery play.