A return of the mega-bonuse

CHAMPAGNE corks are popping in dealing rooms because six-figure bonuses are back with a vengeance this year. It's easy to see why.

Lehman Brothers,the fourth biggest US securities firm, yesterday confirmed the investment banking revival and the sector's re-emergence from a painful three-year bear market. It reported a magnificent 157% jump in fourth-quarter profits to £273m, which swelled its total profit for the year to a stonking £966m.

Rival US firm Bear Stearns came in with forecast-busting fourth-quarter figures showing a 40% surge in fixed-income revenue to £369m. Investment banking revenue almost tripled to £142m.

Luxury car dealers and estate agents in and around the Square Mile are rubbing their hands in anticipation of big business in the New Year.

A traditional pre-Christmas market rally would put the icing on the cake. But unfortunately Santa doesn't look as if he's coming down the chimney of the London Stock Exchange Tower this year.

UK financials reflected the strong earnings performances of their US counterparts and hopes that 2004 will be even more lucrative for investment banks. Bring on those megabids and deals.

Fund managers ISIS Asset Management rose 12p to 229p, Rathbone 6p to 746p and Schroders 7p to 627p. Barclays put on 11 3/4p to 487 3/4p, while Royal Bank of Scotland advanced 22p to 1616p.

Insurers Aviva improved 14 1/2p to 471 1/2p and Prudential 6 1/4p to 463 3/4p. Friends Provident slipped 1 1/4p to 127 1/2p after being fined £675,000 by the FSA.

Electronic controls and cheque-printing group Novar sparked 8p higher to 131 1/2p following a satisfactory trading update. Trading for the full year is line with expectations.

Revived gossip that 20.3% shareholder Nippon Sheet Glass Company of Japan is considering launching a fullscale cash offer for Pilkington , lifted the world's biggest glass manufacturer 4 3/4p to 91 3/4p on turnover of 11m.

p>Currys electrical retailer Dixons softened 1/4p to 132 3/4p, but rival Comet group Kesa advanced 10 3/4p to 258 3/4p ahead of today's long-awaited verdict from the government on extended warranties.

Housebuilder Bovis Homes erected a speculative gain of 16 1/2p at 437 3/4p as rumours of a merger with Redrow (2 1/2p off at 312 1/2p) resurfaced again.

Hopes of a bid from 22.1% Icelandic shareholder Baugur helped Big Food Group to rise 5 1/4p to 155p.

Internet group Emblaze jumped 8p to 123p after its subsidiary Orca International signed an agreement with Nokia giving the mobile phone giant the rights to resell Orca's RiGHTv application suite to telecom operators worldwide.

Aim-quoted Scipher crashed 3 1/4p to 3p. A dire interim performance from its key secure identification business resulted in a £4.4m ebitda loss, which in turn breached the covenant on its Bank of Scotland £5m loan facility. The group is renegotiating an on- demand £3.5m facility. Evolution downgraded from buy to reduce.

CMS WebView, the software systems minnow, added 1p to 13 3/4p after Corporate Synergy placed 25 million shares at 10p with institutional investors. The £2.5m raised will accelerate the roll-out of its proprietary modular software system, Transactional Data Interface.

Minco rose 7/8p to 9 1/8p after receiving a 20-year licence to extract silver in La Laguna Zacatecana in Mexico.

Accountancy group Vantis improved 3p to 119 1/2p after broker Charles Stanley advised clients to buy following upbeat half-year figures.

Wall Street's overnight gain of 106 points prompted a sympathetic but underwhelming Footsie gain of 21.2 points to 4354.2.

As the dollar continued to weaken against the euro and sterling on continuing concern about the US trade deficit, Wall Street succumbed to profittaking yesterday and initially lost 34 points.

Against the pound it fell another 1.1 cents to $1.765, while it slid three-quarters of a cent against the euro to $1.241, a new record.

AFTER two damaging profit warnings this year, at last some bullish news from Television Corporation, 3 1/2p better at 63 1/2p. Its Sunset+Vine subsidiary, which already supplies Five's sports coverage and Channel 4's cricket, is to produce more than 60 hours of the BBC's horse racing coverage. The twoyear contract will bring coverage from racecourses across the country.