Water companies could be about to make a splash

Water shares could be emerging from the lethargy which has left them the poor relations of the stock market.

Most utility action has been generated by the electricities, with bids, real and rumoured, creating surges of excitement.

The main privatised water companies have been left out in the cold, with only one takeover bid to show between them.

Suspicions that their day will come created a swirl of interest. Thames, the biggest of them all, scored the best blue-chip gain of the day, up 15p at 553p in brisk trading.

The waters are offering some comforting dividend yields. Thames, for example, is on 5.8 per cent. They must look attractive against the returns offered by building societies.

But it was not merely solid investment attractions behind yesterday's gains.

South West Water jumped 30p to 538p on talk of a takeover splash. Anyone buying SWW could encounter regulatory problems.

It is Britain's highest-charging water authority and has been accused of wasting the contents of an entire reservoir during last year's drought. And it is one of four companies expected to experience drought problems this year.

Wessex Water, down 4p at 344p, is the favourite to swallow SWW although some believe a Continental predator could appear.

Anglian Water and Severn Trent were others to move ahead. United Utilities (water and electricity) rose 6p to 612p.

One of the industry's tiddlers, Brockhampton, improved 5p to 200p with Butterfield Securities, the stockbroker, saying buy.

Suggestions that the Government was about to clear the generators' bids for Midlands Electricity and Southern Electric made little impression. Midlands fell 8p to 400p and Southern rose 8p to 866p. Northern Electric gained 2p to 665p as analyst presentations got underway.

Yorkshire Electricity, the favourite for an electricity bid, fell another 10p to 793p.

The rest of the market had an uncertain session, flustered by Glaxo Wellcome's results.

The realisation that Glaxo could be forced into another big takeover bid to keep up its drugs momentum lowered the shares 44p to 876p. Zeneca, with the fastest organic growth of the drug majors, lost 14p to 1,281p although it is an obvious candidate for Glaxo. Cadbury Schweppes figures also disconcerted; the shares fell 19p to 536p.

Guinness, strong recently, had a lively time. Stories flowed in early trading of a share buy-back or Guinness buying-in the 20 per cent shareholding held by LVMH, the French group.

But an LVMH denial removed the froth and the shares ended 3p higher at 471p.

House of Fraser's boardroom changes were seen as inviting bid interest, lifting the shares 11p to 188p. Allders, also perceived as a bid candidate, gained 6p to 187p.

BT tumbled 9p to 367.5p as the Government said it was thinking of encouraging more competition. Cable and Wireless fell 4p to 450p.

VisualAction, born out of the Samuelson film equipment division of tarnished Eagle Trust, reached 230p from its 185p placing price. Turnover was more than four million shares. Inn Business, the pubs chain which used to be called United Breweries, returned at 52p, a 4 per cent advance on the suspension level.

Blenheim, the exhibition group, jumped 26p to 272p after Panmure Gordon placed a 500,000 block which had hovered for some time.

Faber Prest, the distributor, crumpled 133p to 415p following a profit warning and Tracker NetWork, a car security group, reversed 120p to 635p; figures are due next month.

Takeover favourite Ladbroke, ahead of figures today, cantered 4p higher at 184p.

Eurodisc Electron, the electronic components group, grew tired of waiting for the signalled Elektrowatt sale of its 42 per cent stake, falling 12p to 298p. There were suggestions a deal Elektrowatt had agreed at 360p a share had been pulled.

House-builders strengthened on continuing hopes of an interest rate cut and NatWest Securities support. The investment house regards Bryant and Bellway as the best of the bunch.

Raine gained 4p to 19p as chairman Roy Barber purchased 500,000 shares at 15p and 16p.

Ingham rose 3p to 33p. Its plans to convert into an investment trust seem to be going ahead which means it will sell its car parts, spinning and property operations.

TAKING STOCK

rJupiter Tyndall, the fund management group, controlled by Commerzbank of Germany, seems to be moving towards mounting a bid for Aberdeen Trust, up 5p at 127p.

Nearly a year after lifting its stake to 15 per cent, the Jupiter group has taken its interest to 29.32 per cent. It acquired shares from Scottish Value which had been regarded as a possible Abtrust predator.

rTullow Oil, with prized gas interests in Pakistan, jumped 3.5p to 79.5p in a sudden flurry of buying.

Stories flowing from Dublin suggested a bid was near with British Gas one of the names in the frame. The group's Pakistan interests are thought to be attracting envious glances. A power station drawing on Tullow's gas is planned.