Market report: Yesterday's trading

By Geoff Foster for MailOnline
Updated: 02:50 EDT, 29 November 2006

Prudential's UK operations might be dragging their feet but its Asian business is going like the clappers, everyone knows that.

If they don't, the insurance giant will bring City analysts and institutional investors up to speed at a major City presentation on Friday.

Buying in anticipation of analyst's upgrades helped the shares touch 654p before they closed ½p easier at 646½p. Prudential Asia has operations in seven countries in the region.

Post Sir John Bond, banking giant HSBC (10p off at 945½p) is known to want 20% of its future revenues to come from life insurance products. Prudential has been in play since Aviva's (½p dearer at 781p) £17bn takeover bid failed.

Rumours have intensified ever since that an increased cash offer from HSBC would be more acceptable to shareholders.

It's worth noting too that Sir John Bond has been hired as a senior adviser to Kohlberg Kravis Roberts to assist the American buyout firm's expansion in Asia.

It would be rather ironic should KKR decide to make a move for Pru's Asian operations. Prudential's own broker UBS also stirred things up by suggesting that the company should merge its British insurance operations with those of rival Resolution (9p easier at 619½p), which has already put itself up for sale.

Royal Bank of Scotland lost an 18p gain to finish 5p off at 1845p after broker Citigroup suggested the owner of NatWest is stalking Dutch investment bank ABN Amro.

Disappointing cash and share bid terms from Spanish utility Iberdrola for Scottish Power (6p off at 740p) and a below par third-quarter profits performance from from South African insurer Old Mutual (10¼p down at 166p) didn't do the Footsie any favours.

It lost an initial 12-point gain to trade 38 points lower and closed 24.2 points off at 6025.9.

Wall Street followed Monday's 159-point decline with an early fall of 49 as dealers awaited a speech on the economy from Fed chairman Ben Bernanke.

Bulls are hopeful that US interest rates have peaked and the next move will be down. Defensive tobacco stocks were popular after a US Supreme Court's decision that let stand a ruling that dismissed a £5.2bn verdict against Philip Morris.

The lawsuit that accused the fag maker of misleading consumers about the risks of smoking 'light' cigarettes. Imperial Tobacco was puffed 39p higher to 1880p, Gallaher 16p to 942p and Bats 12p to 1445p.

The euphoria of Michael Grade's shock defection from the BBC didn't last long as ITV shares of the struggling broadcaster lost a 2p gain to finish 1¾p off at 110¾p on turnover of 69.7m.

I'm sure Rupert Murdoch and his merry men at BSkyB (4p cheaper at 521p) expected a better City reception to his appointment.

BSkyB recently bought an expensive 18% at 135p a share and it looks as though Grade will have to go some to get the stock up to that level.

Countrywide, the UK's largest chain of estate agents, climbed 9¾p to 505¼p. A takeover proposal from 3i, Britain's biggest listed private equity firm, and Harry Hill, the company's managing director and other members of the management team, stalled weeks ago.

The rumoured 530p a share put forward was unacceptable. Hopes that an increased offer would soon be forthcoming attracted buyers and also lifted Rightmove, in which Countrywide owns 22.5%, 19¾p to 323½p.

Awaiting further concrete news of the bid approaches, housebuilder Wilson Bowden jumped 78p more for a two-day surge of 345p at 2176p. Rumoured bidder Redrow firmed 4p further to 640½p.

A warning that regulatory change in Germany will hit revenue growth in 2006 and 2007 left Arthro Kinetics 9p down at 26½p. News of widening full-year losses left Charterhouse Communications 0.375p easier at 1.375p.

Public sector consultant Tribal Group slumped 20p to 139p after warning that fullyear results will be 'significantly' hit by a combination of a slow start to the year and the likely continuation of difficult trading in some markets.