Market report: Friday close

INVESTORS have lost patience with Canadian gas and oil explorer

The shares slumped 72½p to 365p in London today following heavy selling on the Toronto stock market overnight. The company, which put itself up for sale last year, has failed to deliver the goods to shareholders, and speculators now think time is running out.

First Calgary said last month that it was in talks with Spanish oil giant Repsol about developing its Algerian gas interests. Only last week, it announced that the well, near a previous discovery in the Yacoub onshore block, had indicated the presence of oil and gas. The intention was to form a joint venture whereby Repsol would help finance development of the well in return for a stake in the company.

But no news has been forthcoming and shareholders have had enough. The company said today that no assurance can be provided that an agreement will be reached.

First Calgary floated on AIM three years ago at about 50p and hit a peak of 1062½p in February, valuing the business at almost £2bn, on dreams of striking it rich or being bid for.

Share prices generally moved to consolidate their position above 5000, helped by opening gains for the Dow in New York this afternoon. The FTSE 100 index rose 20.6 points to 5029.8.

Reuters led blue-chips higher with a rise of 7p to 407p on the back of a bid for its internet subsidiary's institutional broking arm. In addition, US investment bank JP Morgan has repeated its overweight rating with a target of 450p.

Scottish Power benefited from a an upgrade by broker Merrill Lynch, which has moved from neutral to buy with a target of 510p. The shares rose 13¾p to 478p. Barclays rose 8½p to 528½p after broker Credit Suisse First Boston met chief executive John Varley. Barclays rattled the market last week with talk of rising bad debts and a disappointing performance by its retail banking arm.

Broker Cazenove has tobacco maker Gallaher, which closed unchanged at 855p, from in-line to underperform while raising Imperial Tobacco, off 12p at 1532p, from underperform to inline.

Reinsurer Alea, which lost its place as a constituent of the FTSE 250 index in the quarterly reshuffle earlier this week, was on the slide again today. The shares dropped 35p to 150p after the company told shareholders it needed to raise extra capital to prevent a downgrade in its credit ratings, which currently stand at 'A minus' for financial strength and 'a minus' for issuer credit.

Elsewhere, insurance broker Benfield tumbled 22¾p to 254p on the back of its profits warning.

It was the first day of dealings on AIM for architectural consultant SMC following a placing of 10.67m shares at 40½p each by broker Noble to raise £4.6m. The shares started life at 48½p.

Alternative energy supplier Renova also made its debut on AIM following a placing of 13.1m shares at 69p by broker Bell Lawrie.

The cash will be used to finance a major expansion of its ethanol plant in Torrinton, Wyoming. The shares settled at 79½p.

Also getting under way on AIM was North American Bank Fund following a placing of shares by Arbuthnot Securities at 274p.

The price opened at 282½p before settling at 291p. The group invests in start-up banks in the US.