Market report: Monday close

PRIVATE Finance Initiative investor

John Laing

Shares closed down 1/4p at 229 1/4p as the company's own broker, Bridgewell Securities, placed about seven-and-a-half million shares which were on offer at 226p.

The seller was reckoned to be an institutional shareholder, reducing its weighting in the former construction group.

Laing has heavy institutional backing. At the last count, Henderson Global, among others, held 14% of the shares with Schroder Investment holding a further 13%.

City investors could face a rough ride over the next few days, faced with the first rise in US interest rates for more than four years. The Federal Reserve meets this week to decide by how much it needs to push up rates from their current 1%. Most economists are forecasting a quarter-point rise, but there are fears Fed chairman Alan Greenspan, faced with a growing trade deficit, weak dollar and evidence that the US economic recovery has stalled, may have to raise rates by as much half a point.

Dealers in London say a quarter-point rise has been factored into Wall Street share prices, but investors fear the unexpected. They were showing few signs of worry today. Underpinned by strong opening gains for the Dow in New York this afternoon, the FTSE 100 index rose 24.7 points to 4518.8.

Online bank Egg was ticking better today with a rise of 2 1/4p to 161 1/2p, still waiting for news that its parent company, Prudential, up 10 1/2p at 473 1/2p, has found a buyer for the business.

The Pru put its near-80% stake up for sale earlier this year with Barclays, 5p dearer at 478p, Royal Bank of Scotland, up 19p at 1634p, and US credit-cards giant MBNA expressing an interest. One by one they fell by the wayside but weekend reports claimed a new buyer may have emerged.

Speculators say US banking outfit Capital One is thrashing out details of a £1.4 billion offer.

Abbey National extended Friday's gains with a rise of 14 3/4p to 511 3/4p as speculators dreamed of a bid from Spain's Santander Central Hispano or Royal Bank of Scotland. Talks between Abbey and the Spanish bank broke down in March.

Mobile phone operator mmO2 slid 1/4p to 93 1/2p after Dutch rival KPN finally extinguished hopes that it would bid, having made an informal offer earlier this year. Broker Williams de Broë promptly downgraded mmO2 from hold to sell.

Broker Icap fell 14 3/4p to 263p, reflecting its possible involvement in the FSA inquiry into share trading at Marks & Spencer. Icap chief executive Michael Spencer bought 2m M&S shares prior to the bid from Philip Green.

Aerospace engines group Rolls-Royce hardened 4 3/4p to 246 3/4p. Broker UBS remains neutral but has raised its 12-month target from 175p to 210p. UBS has downgraded Xansa, 1 3/4p cheaper at 82 1/4p, from buy to neutral following last week's full-year results, but raised its target from 95p to 125p.

Alliance UniChem firmed 5 1/2p to 659p after last week's trading update. US broker Lehman Brothers retains its overweight stance and 675p target.

It was the first day of dealings on Aim for specialist food and drinks group Nutrinnovator following a placing by broker Oriel Securities of 3.2m shares at 53p, valuing it at almost £9m.

The shares opened at 57 1/2p before settling at 58 1/2p.

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