Market report: Monday close

By Sarah Marks for MailOnline
Updated: 12:12 EDT, 29 January 2007

A tasty chunk of supermarkets group J Sainsbury changed hands today for around £58m. with many insiders suggesting the seller was a leading member of the Sainsbury family.

The line on the ticker showed a parcel of more than 13m shares, around 0.75% of the company, going through at 432p shortly before 11am. Insiders said the buyer was investment bank Morgan Stanley, then said to be selling them on a first-come, first-served basis.

Sainsbury, down 5p to 432½p, could not confirm the identity of the seller. Although market rumours suggested former Labour Science Minister Lord (David) Sainsbury, the supermarket group pointed out that the three-month lock-in period he pledged to adhere to when he left the Government back in November had not yet ended.

In total the Sainsbury family holds around 19% of the shares - a considerable stake which is often seen as the main stumbling-block for any potential bidder. Any sell-off by the family is usually seen as good thing by those betting on an ultimate takeover.

In the broader market, the FTSE 100 rose 11.9 points to 6239.9 in light trading with British Airways, 14½p ahead at 542p, taking top spot now it has averted the threat of a cabin-staff strike. In New York, the Dow Jones opened 26.30 points up at 12513.50 this afternoon.

Sausage-skins maker Devro rose 15p to 146p after it emerged that a suitor has offered 150p a share, valuing the company at £240m. Devro is often said to be a good buy in an economic downturn as punters swap fillet steak for chipolatas.

Looking at the group's property portfolio, Numis reckons it could be worth £3.1bn and could well be restructured to return some money to shareholders.

The spotlight intensified on Corus, up 2p to an all-time high of 560p ahead of tomorrow's final auction between India's Tata Steel and Brazilian rival CSN. The auction, due to start at 4.30pm, will consist of nine rounds and a final optional knockout.

CSN is currently offering 515p a share, valuing the company at £4.9bn, but it may now be too late to get excited. Broker Citigroup advised its clients to back off, and downgraded the steel producer to hold from buy.

London Stock Exchange chief executive Clara Furse embarked on a final round of talks with the Exchange's key investors, in an effort to make sure their resolve holds steady. The LSE rose 6p to 1301p - defiantly above Nasdaq's-offer of 1243p, with Bear Sterns among the big institutional shareholders topping up their holdings.

The fast-growing debt-services industry today suffered a bloody sell-off as investors reacted to market leader Debt Free Direct group's warning late on Friday that trading conditions were worsening.

Millions of pounds were wiped off the value of the entire sector as Debt Free admitted the impact of intense competitionand resistance from banks to individual voluntary arrangements would hit this year's profits.

Debt Free dropped 148p to 267p - a fall of more than 33% - followed by Debtmatters, down 66p at 163p. Debt Free's announcement was triggered by smaller rival Acuma, down today 20½p at 82½p, which first signalled market difficulties. At least five Aim-listed companies are flogging IVAs and Debt Free is spending more on advertising just to maintain its presence.

Debtmatters today issued its own statement in light of market concerns, stating that trading was in line with expectations. Debts.co.uk also put out a positive comment, but nonetheless fell 12½p to 118½p.

Dealers pointed out that many investors had doubled their money in the last year with Debt Free and were anxious to take profits now. However the feeling is that the industry will not bounce back easily. With so many players, consolidation is inevitable, with Debt Free and Debtmatters more likely to buy than to be bought.

TAKING STOCK: Sectors at a glance

BANKING AND FINANCE
Specialist lender Kensington is due to reveal full-year results tomorrow after warning last year that profits would be at the lower end of expectations. Altium Securities reckons profits for the subprime lender will come in at £65m, compared with £55.8m last time. The dividend could be boosted by 4p to 25.5p.

BUILDING AND PROPERTY
Investors will have their eyes on housebuilder Bellway as it prepares to update the market on trading. The company recently said it was on course to achieve record levels of completions and turnover this year despite this month's rise in interest rates. Rival Crest Nicholson has forecast a strong year despite the increase.

CONSUMER
Carpetright offers good value at the current price of around 1265p and, with a robust operating model and growing European sales, prospects are looking good. Analysts at Panmure Gordon are advising clients to buy, particularly if tomorrow's trading statement triggers any short-term weakness in the shares.

ENGINEERING
Look out on Wednesday for ITM Power, which is due to reveal half-year results. With environmental issues all the rage, ITM and its alternative-fuel technologies for cars is likely to generate a lot of interest, particularly in its home refuelling system, which enables petrol-powered cars to run on hydrogen for short journeys.

HEALTH
GW Pharmaceuticals, the group developing Sativex, the cannabis-derived treatment for patients with multiple sclerosis and other severe medical conditions, is due to unveil half-year figures tomorrow. Investors will be hoping for an update on the regulatory submission in Canada for a higher-dose version of Sativex.

INDUSTRIALS
Electronics giant Canon posted profits that were ahead by almost 16% in the fourth quarter, thanks to strong sales of digital cameras ad colour photocopiers, where it is by far the biggest player in the world. Meanwhile, the company forecast that it would notch up an eighth consecutive year of record profits in 2007.

LEISURE
Green-fingered enthusiasts are expected to boost full-year numbers at Dobbies Garden Centre. The UK's second-biggest gardening supplier is forecast to announce strong figures after revealing that sales for the first 10 weeks of the financial year increased by 6.3% on a like-for-like basis.

MEDIA
Fresh evidence of the poor health of the US education publishing market has negatively affectedReed Elsevier, but broker Collins Stewart is urging clients to remember that 70% of the group's profits come from professional publishing. It also calculates Reed Education will turn around in 2007 with 4% growth.

NATURAL RESOURCES
xpect the focus on BP to intensify in the run-up to next week's results and strategy presentation. Broker Investec reckons the oil giant's management needs to issue a strong message to lure investors back to the shares.

Restructuring might help but Investec would like to see a substantial ordinary dividend increase for starters.

RETAIL
Retailers are more driven by love than money, according to a survey by marketing group Fox Kalomaski which found that 79% of the 200 directors interviewed reckoned it was still fun to work in the industry and only 7% were motivated by cash. Fox does not say whether Bhs billionaire Sir Philip Green was spoken to.

SUPPORT SERVICES
Shares in headhunter Harvey Nash made strong gains after it said results for the year would beat market expectations, thanks to strong demand in the second half. Bridgewell Securities upped its profits forecast and, with rumours it has attracted a predator sweeping the City, says the shares will stay in focus.

TECHNOLOGY
Citigroup reckons that Wolfson Microelectronics could leave a bitter taste following full-year results on Wednesday, countering all the excitement over the news that its technology will be used in Apple's iPhone. If the stock backlog seen in the last quarter has not been cleared, guidance for 2007 could disappoint.

TELECOMS
Satellite broadcaster BSkyB is expected to produce strong half-time results on Wednesday. Subscriber demand was good in the run-up to Christmas with the new 'free' broadband offer stimulating interest. Talk that chief executive James Murdoch is off to run father Rupert's News Corp has been dismissed.

TRANSPORT
Interest in British Airways' thirdquarter figures on Friday is likely to be overshadowed by scrutiny of the strike action by the airline's cabin crew. However, the company rating is relatively low despite a 64% rise in the share price over the past years, suggesting any impact from the strike is already factored in.

UTILITIES
One of the biggest waste contracts in Britain - clearing the rubbish bins in Greater Manchester, enforcing recycling and significantly reducing amounts of waste going to landfill - is close to being awarded to Viridor, the waste arm of South West Water group Pennon and John Laing, the infrastructure investor.