The Electronic Telegraph 25 April 1995 CITY

The Market

More volatility on the way

By Paul Murphy

Nevertheless, the bears were rewarded later with a set of money supply figures which, while brokers found them difficult to read, were certainly out of kilter with expectations. That was good for almost 24 points off the FT-SE 100 index.

Then there were reports of a market-moving programme trade-a lumpy affair, where one large institution seemed to be buying big lines of stock, across-the-board. Top prices recovered.

The recovery continued after lunch. Wall Street, after wobbling a bit at the opening, looked to be moving higher; sterling perked up a bit; and there was talk in the futures market of a few heavyweight punters betting on the Footsie 3200 being established as the floor to a new trading range over the next few months.

It was a confusing day and brokers expect further volatility this week with the G7 meeting and a range of important economic statistics. Yet the main index managed to close 9.4 points higher at 3209.3. As usual, the FT-SE Mid 250 index lagged behind, ending 7.3 points lower at 3497.8.

Abbey National stood out in an otherwise mixed banking sector, putting on 11 to 480p on confirmation that it is pursuing a takeover of National & Provincial Building Society.

Elsewhere, the leaders were pretty mixed, although Associated British Foods fell back 16 to 638p after figures showing margin pressures.

In a sector that has seen its fair share of profit warnings over the past year, Cray Electronics collapsed from 155p to 79p after news that market forecasts of £35m pre-tax for the current year should be revised all the way down to £5m or so.

Meanwhile, MR Data Management, a little company specialising in document processing, seems to be having a few problems distributing information to its shareholders. For example, although there was no official confirmation yesterday, managing director Michael Elliott appears to have left the company-a fact apparently picked up by one or two smarter brokers, who seemed to be selling stock.

Despite rumours that another director was on the way out-the shares have fallen 60pc over the last year or so-the market price actually closed a penny higher at 85p.

The firm lost several board members the year before last. It looked to be rebuilding its image before delays over completing sales of data management systems to certain police forces sparked a profits warning last summer.

A couple of years ago, it is thought that MR Data tried to sell itself to Hays, the go-go business services group headed by Ronnie Frost. Speculation on a takeover has blown up every now and again ever since but the best market sources doubt such a move was ever on cards-then or now.

More bad news from the IT sector came with a warning from computer group Wakebourne, which still seems to be clearing out skeletons from its past as Maddox Group. The shares slumped from 62p to 45p, although brokers indicated that a few well-regarded punters were moving in to buy stock just before the close. The implication was that the fall has been overdone.

Meanwhile, Northamber perked up 9 to 94p after its own profits warning-a warning that profits are likely to better market expectations. With sales developing strongly and competition moderating, results for the period to the end of April should be "significantly in excess" of current forecasts.

The warning from Wakebourne had no discernable effect on Stratagem, a mini-conglomerate with a quarter or so of its interests in computer maintenance. Stratagem jumped 9 to 175p after interim figures showed a strong recovery in earnings.

Two years ago it discussed selling its computer business to Maddox before it realised Maddox had little or no money. It has since developed the division itself and no longer plans a sale.

Other notable results-related moves included Melrose Energy, up 2 to 27p after interim figures. Melrose is a re-vamp of Crossroads Oil & Gas. Now double the size and with new management, the group specialises in "limited oil partnerships"-schemes that allow rich (and brave) investors to play the game of oil exploration while cutting tax liabilities. Melrose warrants, up 21/2 to 7p yesterday, have now doubled in less than a month.

Glaxo added 19 to 735p on official confirmation that the US Court of Appeals has ruled in the British drug giant's favour in its Zantac patent infingement action against Canada's Novopharm. Turnover in the shares was exceptionally heavy on a day when most other big drug stocks did little but move sideways.

The news from Cray did rub off on Racal Electronics, which some wild bid speculators hoped Cray might actually take over not too long ago. Racal lost 8 to 240p.

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