GW Pharma lifted by cannabis ruling

HOME Secretary David Blunkett's decision to reclassify cannabis from a class B drug to a less-punitive class C had buyers sniffing around

Although analysts were quick to point out that the company is not at all involved in the street cannabis debate, investors dosed up with stock on hopes that the government will soon change the law for prescription cannabis-based medicines.

The news put the spotlight on GW Pharma's treatments for multiple sclerosis and cancer pain. It has developed sprays that enable the material to be absorbed directly into the blood stream via the mucous under the tongue, rather than swallowed. The sprays contain formulations of extracts of specific varieties of the cannabis plant.

The treatments entered clinical Phase III trials in May. Peel Hunt analyst Gary Wanders is bullish and believes the stock is cheap. He says: 'Data on clinical trials so far has been very good. The MS treatment should by late 2002 or early 2003 be ready to be submitted to the UK medical authorities for marketing.'

The resurgent Footsie found itself up a further 72.2 points before 10am as rumours did the rounds that Osama Bin Laden had been killed in Afghanistan. Government denials prompted profit-taking that accelerated when Wall Street opened 60 points down. The London close was 25.7 points lower at 5167.6.

Shares had drifted, too, on fading hopes of a cut in European Central Bank interest rates today. David Brown, chief European economist at Bear Stearns said: 'The ECB is still seen as hampering future eurozone recovery potential in the absence of bigger slices of monetary stimulus. The ECB ought to cut, but it may well decide to wait until November.'

Logica was the top Footsie performer, rising 47p to 773p after stating that business-is going well and nothing has changed since early September. It still expects a strong performance for the current year.

Music giant EMI retrieved an initial 9p deficit to finish 12p higher at 291p. Credit Lyonnais Securities advised clients to tune in and set a price target of 380p. The rise was accompanied by revived bid talk and industry suggestions that Alain Levy, the new head of its recorded music division, will soon oust Eric Nicoli as chairman.

Clothing retailers continued to reflect fears of a pre-Christmas slowdown in sales. Debenhams (1 1/2p off at 386 1/2p) warned on Tuesday that current sales growth had slowed substantially. Burberry owner Great Universal Stores lost 35p more to 483p, Next 33p to 905p, Matalan 37p to 463p and Selfridges 6 1/2p to 290p. Prevailing worries about ITV Digital's future left Granada 10p down at 128p and Carlton Communications 3 1/4p off at 191 1/2p.

Buyers were sweet on Tate & Lyle amid whispers that a bullish circular from a leading broker will be landing on fund managers' desks this morning. The close was 20 1/2p better at 278p.

Dealings in Stephen Barclay's Aim-listed shell Abinger were suspended at 1 1/2p (up 1/2p) following a hefty turnover of 8.8m. It confirmed it is in reverse takeover talks.

Business-to-business information, advertising and services provider WMRC plummeted 4 1/2p to 7p. A big seller was cleared out at 6p. Valued at only £6.7m and with almost as much cash on the balance sheet, it could be set for a big bounce, say dealers.

Currently in the middle of a radical restructuring, Netcentric soared 50% to 0.95p.

Nettec, which provides digital services to corporate clients, touched 15 1/2p before closing 3 1/4p better at 13 1/4p. The company has received several bid approaches. Former chairman Jeremy White has been a big buyer of late and sits on 25.2% via First City Investments.

Despite an upbeat agm, Hereward Ventures lost 1p to 8 1/2p on profit-taking. The good news is that HV has won the tender for the Sedefche Exploration permit in Bulgaria. The permit area is next to Navan Mining's Krumovgrad Permit, the site of the Ada Tepe high-grade gold discovery. Navan fell 1/2p to 47 1/2p.

Murchison was suspended at 31p following its long-awaited purchase of Rio Tinto's 49% interest in Somincor, the holding company for the Neves Corvo copper mine in Southern Portugal for $81m (£57m). The mine processes 2.3m tonnes of copper a year. Murchison's stock continued trading in Australia and was 10% higher on the deal.

Oystertech jumped 5 1/2p to 45 1/2p following a £30.6m placing and open offer to help fund the acquisition of a plumbing business from Delta.

DEALERS believe it will be a case of fast-forward for Home Entertainment when shares of the second-largest video chain behind Blockbusters make their debut today. Placed at 170p by broker Teather & Greenwood, they should trade at a decent premium. Created by film buff Iain Muspratt, HE operates through a chain of 172 Choices Video stores and earned pretax profits of £4.9m on turnover of £83m last year.