Market Report: Kingfisher left out of the stores party

SHARES in Kingfisher, the Comet and Woolworth group, missed a modest retail celebration yesterday.

The better-than-expected retail sales figures for January pushed many high street shares higher and helped the stock market hold its own, despite the uncertainty created by President Bill Clinton's planned US tax increases and spending cuts.

But Kingfisher ignored the January figures. Its shares fell 5p to 527p as stories circulated that its expected rights issue would be announced today.

A Kingfisher cash call has appeared inevitable since it became known it planned to buy Darty, the leading French electrical retailer. Any takeover is likely to cost more than pounds 1bn.

At one time it was felt Kingfisher would have to raise around pounds 900m to meet the Darty cost. But there is now a belief it will only tap shareholders for pounds 350m. It is likely that shares, staggered payments and borrowings will make up the rest of the outlay.

Kingfisher, which also embraces the B&Q do-it-yourself and Superdrug chains, is thought to have been talking to Darty, which has 12 per cent of the French market through 130

outlets, for four years.

Among stores shares higher were Dixons, Marks & Spencer, Next and Storehouse. Boots, with the added inspiration of a US launch for its Manoplax heart drug, rose 6p to 491p.

The FT-SE 100 index ended 1.8 points higher at 2,814 with the Clinton factor retarding interest. It was, at one time, down 18. Second-line and fringe shares were firm. The FT-SE index measuring the 250 shares just outside the 100 index rose 7.9 to 3,017.4.

Kingfisher was not, however, the only share to feel the impact of rights rumours. Glaxo Holdings, with its interim figures due today and persistent speculation of a big US strike, remained a nervous market with the shares easing 5p to 662p.

Worries about possible increased US taxes on tobacco left BAT Industries down 11p at 958p. Tomkins, ruffled by talk of a US gun tax, slipped 3p to 255p.

BT had an active session. The fully paid shares fell 5p to 398p; the partly paid (currently subject to the final call) were lowered 4.5p to 293p. The limit agreed on private circuit price increases did not help sentiment.

There was also talk that the new Whitehall watchdog would be named in the next two days. The hovering presence of the Government's remaining 22 per cent interest, due to be sold, is also beginning to unsettle the shares.

Currency considerations prompted Hoare Govett to lift its forecasts for Cable & Wireless, up 10p to 740p.

Abbey National was the outstanding performer on the banking pitch. The shares jumped 14p to 365p with talk that one leading securities house had absorbed all the available stock. Kleinwort Benson was thought to be making positive noises. The shares have been as high as 399p in the past year. Finance group Brown Shipley, the subject of an agreed 30p a share offer, rose 2p to 35p as Guinness Peat disclosed a 7.49 per cent stake, picked up at 33p.

Engineer Siebe slipped 6p to 463p as Carr Kitcat & Aitken said the shares were overvalued; Smiths Industries eased 15p to 349p on worries about the Eurofighter project.

The holiday group Airtours rose 10p to 287p as the rumour went round that its hostile bid for Owners Abroad would not be referred to the Monopolies and Mergers Commission. An announcement is expected today. Owners slipped 1p to 118p.

Carlton Communications enjoyed a run, said to be on US buying. The shares rose 13p to 768p.

J Sainsbury fell 11p to 511p. Kleinwort placed 1.75 million shares at 507p. Other supermarket shares were firm with Argyll Group 5.5p higher at 368p and Tesco 2p up at 245p.

Dalepak, the convenience food group, gained 7p to 281p, a two-day gain of 19p. Takeover speculation is behind the advance. Lower interim profits and warnings that year's figures will be lower have hit the shares, and there is a feeling any predator could feel the time is ripe to strike. The shares have been as high as 435p in the past year.

Utilities were firm, with buyers encouraged by dividend yields. Thames Water rose 6p to 510p; Yorkshire Electricity 8p to 497p. National Power and PowerGen scored strong gains.

Oils were mainly lower although Lasmo advanced 6p to 172p, helped by Smith New Court taking the view that the dividend will be held. Pittencrieff, which made a placing at 312p on Tuesday, rose further, gaining another 27p to 378p. The company plans to float its communications business.

Aberdeen Petroleum, where Pittencrieff has a substantial stake and is expected to mount a bid, improved 1.5p to 14.5p.

Hadleigh Industries Group, the storage and transport products supplier, rose a further 10p to 82p; Ossory Estates, where revamping schemes are being hatched, held at 8p. Lord Romsey lifted his interest to 4.41 per cent.

Shares of URS International were suspended at 1/2 p. They have languished around that price for two years. The struggling US architectural engineer was floated just ahead of the 1987 crash at 120p. The suspension heralds a revamping exercise with Atreus, a private UK bathroom designer, set to reverse into URS. The combined group should be valued at pounds 7m.

Lynx Holdings, with computer services and playground equipment interests, is the latest tiddler to attract interest. The shares were at one time 8.5p higher at 32.5p. They closed at 29p. Lynx has had an erratic time since it arrived at 65p five years ago. It made profits of pounds 115,000, down from pounds 224,000, last year and cut its dividend from 1.25p a share to 1p.