Footsie finds all bets are off

AND they're off! Shares in the major bookies made all the running after the government, against all the odds, said it would allow fixed-odds betting terminals (FOBTs) in betting shops.

Up to four FOBTs - standalone betting terminals on which punters can play games - will be allowed. The machines are particularly attractive because of the potential payouts, a maximum of £500 while the maximum stake is limited to £100.

The news came as a big relief to bookies because industry rumours suggested shops would be limited to one FOBT or be forced to do without them.

Mark Reed, leisure analyst at Teather & Greenwood, said: 'It's very good news. These machines have been the real driver of bookmakers' profits from 2002. Most people were expecting FOBTs to be banned from shops but not only can shops keep existing machines, they can roll out even more. FOBTs will make the industry £100m this year, so analysts will have to now raise earnings forecasts for next year. The rally has only just begun.'

William Hill, the UK's second biggest bookmaker and Reed's strongest buy in the sector, galloped 16p ahead to 375p. Stanley Leisure, the UK's number three bookie and its biggest casino operator, gained 14 3/4p to 367 3/4p. Hilton Group, owner of Britain's biggest chain Ladbrokes, cantered 2 1/2p forward to 207 3/4p.

All bets appeared to be off as far as the Footsie was concerned. It drifted 38.6 points lower before closing 27.3 points down at 4327.4. Buyers stayed on the sidelines because of concern about whether the weak dollar will affect the main blue chips' overseas earnings potential and continuing fears of a terrorist attack in the UK during President Bush's visit.

Wall Street did its best to steady the ship with an early rise of 55 points. A big talking point in New York was Charles Schwab's acquisition of Soundview Technology, which will boost the research operation at the discount broker.

Dollar-sensitive drug stocks were particularly friendless with Astra-Zeneca 77p off at 2725p and Glaxo-SmithKline 28p off at 1347p. Dealers still expect GSK to bounce strongly ahead of its research and development day on December 3.

Buying ahead of next week's results left property giant British Land 18 1/2p better at 556 3/4p. Donny Gordon's Liberty International rose 17 1/2p to 661 1/2p and Land Securities rose 13 1/2p to 972 1/2p.

London property group Derwent Valley cheapened 13p to 758 1/2p. Profit takers moved in after Tuesday's 69p gain, which followed news of a takeover approach by Gibraltar-based Winton Limited.

Revived gossip of an imminent Icelandic bid helped investment bank Singer & Friedlander rise 15p to 224p. Kaupthing-Bunadarbanki increased its stake in S&F to 9.6% and is said to be ready to launch a full-scale offer of about 260p a share. It wants to expand in the UK after acquiring BMY Corporate Finance in February.

The sale by S&F of 26.2% of its 30.8% stake in Swedish broker Carnegie effectively cleared the way for the Icelanders to pounce.

United Business Media increased 19 1/4p at 483 1/2p on hearing that its US hi-tech publishing business, CMP Media, increased its market share to 31.1%, up from 28.8% a year ago.

Fashion group French Connection closed a ragged 126p down at 1790p after Investec downgraded from buy to hold.

Niche printing group Wyndeham Press reflected recovery hopes with a 5 1/2p improvement to 98p. Chairman Bryan Bedson says the group is well placed to increase its market share and take advantage of any improvement in market conditions.

Aim-quoted Auto Indemnity accelerated 3 3/4p to 38 1/2p. Profits for the year to end-December will be significantly ahead of market forecasts.

Zoo Digital held at 13p following news of a proposed placing of 54.7m shares at 10 1/2p a share. Funds raised will be used to accelerate the development of the company's DVDExtraTM technology.