Market report: Monday close

SHAREHOLDERS of posh housebuilder

US securities house Morgan Stanley has lifted its 12-month target from 988p to a whopping 1375p and repeated its overweight rating.

It says the group has the ability to unlock further value for shareholders. Berkeley has already agreed to hand back the equivalent of 1200p a share to them, and the leveraging of its operations - along with the potential for its urban regeneration programme - may also be good news in the long run.

MS also says that, with land bank values leveraged to house prices, Berkeley's strategy of reducing land reinvestment is the surest route to safeguarding shareholder money in the medium term.

Housebuilders generally traded mixed following a look-ahead by broker Merrill Lynch at the results season that is expected to produce another record increase in profits.

Bellway advanced 6 1/2p to 769 1/2p while Bovis Homes fell 12 1/2p to 560 1/2p and Wilson Bowden shed 9p to 1104p.

A positive-start to trading in New York this afternoon failed to stem losses in London. The FTSE 100 index fell 30.80 points to 4459.30.

Discount clothes seller Matalan added 6 1/2p to 206 1/4p on weekend reports of a £1bn bid from the world's biggest retailer, Wal-Mart.

Matalan is due to put out a trading statement on Thursday. Broker Numis Securities expects them to make good reading with a forecast 4% increase in like-for-like sales and a £1m rise in pre-tax profits to £44.5m.

Numis does not rule out a bid from Wal-Mart, but says an offer is more likely to come from one of the venture capitalist outfits. Paul Smiddy at broker RW Baird says: 'A possible bid by Wal-Mart is certainly plausible.'

Manchester United firmed 4 1/4p to 261 1/4p after netting Everton's Wayne Rooney just hours before the shutter came down on the transfer window. It is thought United may have paid up to £25m. Meanwhile, there is persistent talk a 10% stake in the shares may have changed hands.

Aim-listed Mears jumped 10p to a new peak of 193 1/2p after weighing in with interim results showing pre-tax profits climbing from £2.16m to a record £2.87m.

Food giant Tate & Lyle rose 12 1/4p to 358p as a big buyer did the rounds. A line of fourm shares was offered at 345p before being sold on at 348p.

EasyJet fell 2 1/4p to 146p after broker Panmure Gordon turned seller.

Aim-listed Southern African Resources slid 1/4p to 29 3/4p. It has appointed former Impala Platinum boss John Smithies as a non-executive director. Followers of the company say founder and former England cricketer Phil Edmonds may decide to take a back seat soon to concentrate on other interests.

Software specialist Dicom, up 25 1/2p at 699p, is paying £27.2m for Topcall International, a provider of communications solutions. Dicom has also reported an increase in pre-tax profits last year from £11.7m to £13.3m before exceptionals. A total of £15m has ben pencilled in for the current year.

Croatian gaming outfit Cubus Lux made its debut on AIM following a placing by broker Rowan Dartington at 22 1/2p. The price opened at 25p.