Clamour for HMV strikes right note with the bulls

PROBABLY keen to get any urgent business out of the way before today's UK Open golf championship at Sandwich, Kent, fund managers at UBS and Merrill Lynch placed large lines of HMV and Punch Taverns.

The fact that they were at tasty discounts to the previous night's closing prices and hungry institutions wanted a lot more, suggests the market is rock solid underneath - good news for bulls.

Floated in May 2002 at 192p, HMV, Britain's biggest music and DVD retailer, touched 151 3/4p before closing 8p off at 153p. UBS placed 31.7m shares at 153p with both present and new shareholders.

Advent Venture Capital, a founder shareholder, sold its entire 7.88% stake. Apparently, Advent was never deemed to be a long-term holder.

HMV recently reported a 20.6% jump in pretax profits to £96.5m. Its Waterstones division captured 10% of first-day sales of the latest Harry Potter novel.

But it has generally disappointed since flotation, hit by intermittent trading worries and longer term concerns, including music piracy.

Pubs group Punch Taverns lost 8p to 277p after Merrill Lynch placed 24m shares at around 275p with various institutional clients. Whispers suggested the seller was US fund manager Fidelity, which holds more than 10%.

After shock profit warnings from Lucent Technologies and Motorola had upset the applecart on Wall Street - the Dow lost an early 24-point gain to trade 86 down at one point - the Footsie drifted lower in sympathy to finish 25.4 off at 4077.1.

Sterling eased to $1.5915 as the dollar gained, while the euro traded at 70.5p and $1.1225.

Northern Rock, which kicks off the banks' interim results season today, lost 12 1/2p to 697p. Analysts forecast a 17% rise in pretax profits to £179m.

Royal Bank of Scotland, which reports on August 7, gained 29p to 1759p. Its £1.1bn purchase last month of Churchill Insurance allayed market fears that it had a much bigger acquisition up its kilt. Despite rumours of a bid from Bank of America refusing to lie down, Barclays eased 1 1/4p to 459 3/4p. Insurer Old Mutual lost 4p further to 92p on continuing concern that it has Britannic Group (4 1/2p lower at 266 1/2p) on its shopping list.

Merchant bank Singer & Friedlander rose 7p to 153 1/2p after a strong second-quarter profits recovery at its 31%- owned Swedish stockbroker, Carnegie.

Taking the view that with 100p-ashare of cash in the bank and at only eight times earnings, the shares look dirt cheap, investors chased Irish drugs group Galen 27 1/2p higher to 633 1/2p.

Penguin-suit hirer Moss Bros improved 1/2p to 62p following confirmation that Joe Bloggs jeans man Shami Ahmed has raised his interest to 21.15% via 'contracts for differences'.

Rumours that its US business has emerged from Chapter 11 bankruptcy protection helped office renter Regus edge forward 1/2p to 37 3/4p.

Engineer Charter, which saw a 410pa-share offer from Lincoln Electric of the US go up in smoke in 2000, rose 10 1/2p to 70p. It has been having discussions with its banks about the renewal of its £127m revolving credit facility due to expire this month.

Persistent demand on recovery hopes lifted electronic equipment group Invensys 2 1/4p higher to 25 1/4p.

Robert Peel's Aim-listed Peel Hotels rose 8p to 91 1/2p. Charlie Peel, Robert's brother and joint founder of stockbroker Peel Hunt, now part of KBC, has raised his holding from 17.3% to 19%.

Tiger Tiger bar group Urbium soared a further 43 1/2p to 431 1/2p making a two-day surge of 96 1/2p on the bullish trading statement. Director Nick Irens also bought 2,000 shares at 375p.

Orad Hi-Tec Systems, a developer of live TV production technology, began life on Aim at 89p and edged forward to 91 1/2p. Lorien shed 10p to 51 1/2p after a profits warning.

A HEFTY 41.8m shares in biotech minnow XTL Biopharmaceuticals changed hands as broker Shore Capital and its clients sold 14.45m shares, or 13% of the equity, at 12p. They retain 5%. The buyer is Israel Healthcare Ventures, a fund investing in Israeli life sciences companies. XTL closed 7/8p better at 11 3/8p. The peak in 2001 was 169 1/2p.