Rate rise fears stifle share deals

THERE wasn't an awful lot on the blue-chip front for dealers to get their teeth into. That old adage of 'sell in May and go away, return again on St Ledger Day' (11 September) must have cropped up in conversation in many a City watering hole.

Invitations to attend all the big corporate beanos at Ascot, Wimbledon and Henley will soon be winging their way to fund managers who will jump at the chance to rub shoulders with the great and the good. More often than not over the years, business suffers as a result and shares just drift for want of support.

The Footsie yesterday traded within narrow limits and closed 1.8 points dearer at 4571.8. Wall Street didn't offer any late inspiration, losing an initial 39-point gain to trade 25 points lower. Sterling improved $1.7858, while the euro eased to 66.4p and $1.186.

Lingering fears of a rise in UK interest rates next month continues to stifle investment enterprise. Paul Tucker, the Monetary Policy Committee member, said over the weekend that rates should rise from the current level of 4%. There is also the growing prospect of a rate rise across the pond over the summer.

Reports of pending bullish circular helped Rolls-Royce Group rise 9 1/4p to 239 1/4p. Fuelling the rise was news that Boeing has won its first customer for the new 7E7 Dreamliner. Rolls supplies engines for the Dreamliner.

Hopes that today's agm statement will be upbeat lifted mortgage bank Northern Rock 10 1/2p to 782p.

AstraZeneca cheapened 19p to 2636p ahead of Thursday's first-quarter figures. An additional irritant was news that Roche had announced positive Phase III trials for anti-cancer treatment Tarceva, a competitor to AZ's product Iressa.

There was no stopping Cairn Energy again as it spurted 34p further to 1047p on an investment recommendation. The price has soared from around the £3 level in late January after announcing not just one, but three 'gushers' at its Rajasthan drilling project in India.

Pan Andean climbed 4p to 17 1/2p. Drilling at its 50%-owned High Island 68 interest, in the shallow waters off the Gulf of Mexico, will commence next month.

Electrical equipment group Laird gained 6 1/2p to 329p following its £15.5m acquisition of Thermagon, which makes thermally-conductive products.

Fashion retailer Austin Reed improved 6p to 147 1/2p after confirmation that property company Dawnay Day has acquired jeans entrepreneur-Shami Ahmed's 9% stake in the company and now holds 18.7%.

Women's fashion retailer Monsoon reflected management buyout hopes at 171 1/2p, up 14p.

Aim-quoted TV home shopping company Ideal Shopping improved 2p more to 69 1/2p. Its live home-shopping channel, Ideal World, is to be broadcast as part of the Freeview line-up to an estimated three million homes.

As software group London Bridge jumped 32p to 93 1/2p in response to an agreed 95p-per-share cash offer from the US financial software group Fair Isaac, Innovation Group hardened 1p to 35p. Dealers reckon IG now looks undervalued.

Bathroom products maker Airbath cleaned up with a gain of 1 5/8p to 4 1/8p on news of a bid approach.

After a big stock overhang was cleared, KBC Advanced Technologies jumped 5p to 31 1/2p. An arbitration process has also decided in its favour in a dispute with fellow consultancy AEA Technology over their jointly developed Hysys Refinery, which is used by the oil industry to simulate refinery processes.

UKbetting, the sports content and online gaming company, edged up 1 1/4p to 59 1/2p on a positive trading statement.

Trans-Siberian Gold hardened 1 1/2p to 125p amid whispers of a possible bid from Barrick Mining. Phil Edmonds' Central African Mining & Exploration firmed 3/4p to 8p after winning exploration permits in the diamond-rich Kasai Oriental Province of the Democratic Republic of Congo.

Placed at 25p by broker JM Finn, shares of York Pharma raced away to close 17p higher at 42p.

Aim-quoted financial PR firm Hansard gained 1 1/2p to a year's high of 27 1/2p following a strong return to profitability. Annual pretax profits of £140,000 replaced a loss of £106,000. Conditions in the smaller company market have improved and nine new accounts were won during March and April. There has also been an increase in the average retainer fee per client. Seymour Pierce's target price is 37p.