The difference a day made

JOHN SHEPHERD

On the night of Monday, March 6, small shareholders of National Power and PowerGen were celebrating instant profits of pounds 30 for every 200 shares they owned. The feeling lasted less than 24 hours.

After Professor Littlechild's bombshell on Tuesday, profits were down to two thirds. By Thursday, they were losing money and the investment was all square by Friday. But in the turmoil of inquests which followed, the Government stood accused of conning investors. Institutional investors, who had scrambled to increase their holdings on that Monday and had lost millions of pounds on their investments in the electricity sector, were livid.

By the end of Wednesday, shares in the power generators were a hair's breadth above the offer prices. PowerGen stood at 187.5p and National Power at 175.5p. More than 130m shares changed hands in the first two days of the week.

On Thursday, National Power fell to 166p, a 4p discount to the offer price, and PowerGen closed at 176p, representing a paper loss of 9.5p per share.

Anguish, though, was relieved ahead of the weekend. National Power's new shares finished the week 3.5p above the offer price at 173.5p, while PowerGen finished all-square at 185.5p.

National Power's partly paid shares closed yesterday at 207.5p, a profit of 22 per cent and a performance consistent with the rest of the market. PowerGen's new shares have fared worse, but, at 208p, show 12 per cent profit over three months.

Michael Lawrence, chief executive of the Stock Exchange:

"If there hadn't been Crown immunity we would have referred our findings to the Securities and Futures Authority or some other regulatory authority. There would have been a regulatory investigation."

Kenneth Clarke, the Chancellor:

"There was certainly no evidence of criminal offences."

Jack Cunningham, shadow trade and industry spokesman:

"What the Chancellor and his officials did was withhold market sensitive information. They wanted to get money into the Treasury so they misled people."