Market report: Close

By MICKEY CLARK FOR MAILONLINE
Updated:

 

Someone spoilt Rupert Murdoch's breakfast today by flogging a 3.1% stake, worth £677m, in his satellite broadcaster BSkyB at a hefty discount to the ruling market price.

Shares in BSkyB touched 1079p during the first few minutes of trading after broker Credit Suisse First Boston and rival Goldman Sachs began placing a parcel of 58 million shares with various institutions. CSFB and Goldman Sachs are believed to have paid only 1005p a share for the stake before starting to sell it on to the institutions at 1025p. The discount was so generous that fund managers who bought the shares were able to sell them on immediately at a profit. It was a good morning's work for CSFB and Goldman, which between them made a profit of £11.6m. The fall in BSkyB was reduced to 47p at 1121p once the placing had been completed.

The stake was the remaining holding of KirchGruppe, owner of German pay-per-view broadcaster Kirch-PayTV, with more than two million subscribers. Murdoch acquired a 24% stake in Kirch for £942m last year, giving him a foothold in Europe's largest TV market and an alternative partner to French media giant Vivendi. In return Kirch-Gruppe received a 4.3% stake in BSkyB as part payment. Back in February, shares of BSkyB reached a peak of 2158p.

Share prices generally marked time in the face of a heavy 112-point sell-off overnight for the Dow Jones in New York. Punters in London were able to draw some comfort from Nasdaq's resilient performance overnight. The FTSE 100 index began ticking better with a rise of 29.2 at 6644.3 after the European Central Bank raised rates a quarter point. It closed up 57.6p at 6672.7.

Private investors are ploughing fresh funds back into hi-tech companies. Colt Telecom rose 359p to 2320p, closely followed by ARM Holdings, up 85p to 920p, and Logica, reporting next week, up 110p to 2155p. CMG rose another 83p to 1365p as Lehman Brothers raised its earnings forecast by 11%. Even Freeserve rallied 31p to 270p. But broker HSBC Securities is convinced the shares will still be relegated from the top 100 index after next week's quarterly reshuffle.

US securities house Schroder Salomon Smith Barney has been a long-term bull of the oil sector. Today it downgraded its rating from 'overweight' to 'neutral', claiming that the current oil price was unsustainable. It has also lowered its recommendation on BP Amoco, down 9p at 630 1/2p, from 'outperform' to 'neutral', with the rating on Shell Transport & Trading, 10 1/2p off at 588p, cut to 'outperform' from an outright 'buy'.

Scottish & Newcastle fell 1 1/2p to 461p after the group confirmed it was in talks to sell Center Parcs to the French holiday group Pierre et Vacances. Brokers say it could fetch up to £700m. Bass suffered a second day of losses, falling 8p to 672p after Goldman Sachs met the company and reduced its profits forecasts for the current year by 2% to £765m and for 2001 by 4% to £826m. Merrill Lynch downgraded yesterday.

Carphone Warehouse rose 9p to 215p as US brokerage Morgan Stanley Dean Witter initiated coverage with a 'strong buy' and target price of 245p. That compares with the 200p at which they were floated earlier this month.

...And in New York
Wall Street gained ground as investors braced for tomorrow's key jobless figures. Thd Dow rose 169.8 to 11272.81 while the Nasdaq gained 70.55 to 4174.36.

Geoff Foster's report on Wednesday's trading

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