Yesterday' trading: A black day for Manganese cabs

By Geoff Foster for MailOnline
Updated: 03:21 EDT, 19 September 2008

While central banks try to put out fires here, there and everywhere with injections of cash to keep the global financial system up and running, London taxi cabs are going up in smoke.

Geoff Foster: gives us yesterday's trading report

Shares of Manganese Bronze, the company that manufactures the iconic black cab, succumbed to renewed selling and touched 245p before closing only a penny lower at a year's low of 264p as dealers heard that yet another of its 'expensive' TX4 cabs had burst into flames in Central London.

Spontaneous fires in TX4s with '56' registration plates in recent weeks have led to 600 being recalled by London Taxis International - the Coventry-based manufacturing subsidiary of MB. Along with the Public Carriage Office, LTI is investigating the cause of the problem which could one day easily lead to fatalities and compensation claims.

Dicky Dunn, a north London cabbie, forked out £31,500 on his TX4 just over a year ago. It went up in smoke in Snow Hill, High Holborn, last week with three punters on board.

All of this spells trouble for Manganese Bronze, whose taxi sales have already fallen 30pc over the past year because of the credit crunch.

Fearing they could literally be getting into a hot seat could make Londoners choose the bus or tube to reach their destination.

Despite Wall Street's overnight fall of 449 points, the Footsie climbed 103.5 points before lunch after major central banks poured billions of dollars into money markets to boost liquidity and ensure that another US investment bank does not fall victim to the heightened credit crisis.

However, when shares of Morgan Stanley moved sharply south again amid speculation it could be about to climb into bed with US bank Wachovia, sellers moved in. The close was 32.4 points down at 4,880. Wall Street finished 410 points up at 11019.69 after a late rally.

Forever plagued in recent years about its dividend policy and its ability to pay one, Lloyds TSB lost a 29p gain to close 42¼p off at 237½p.

Terms of its agreed £12.2bn all-share offer for beleaguered HBOS showed that the enlarged group will pay its final dividend this year in shares to attain its 'desired capital ratios and to help finance the growth of the business'. Shareholders are not happy; they want cash.

Meanwhile, HBOS reflected relief that it has found a safe home in Lloyds TSB and soared 82p before closing 25½p better at 172.6p.

Charles Stanley lifted its recommendation from reduce to hold and said those shareholders who took up the rights issue at 275p may not be too pleased but in the longerterm, due to the potential for significant synergies to be created, this is likely to be a good deal for both sets of shareholders.

Shares of Barclays were all over the shop following the bank's £140m acquisition of Lehman's North American business. It has also paid £800m for its headquarters and two data centres.

They traded as high as 345p and as low as 285½p before closing 16%frac34;p easier at 301p after 226m shares were placed at 310p a share with various institutions to help finance the deal.

Insurer Old Mutual fell 11¾p to 70p amid reports of a pending broker downgrade.

An upgrade by insurance rating agency AM Best helped Lloyds insurer Hiscox rise 15¾:p to 265¾p. Vague takeover chatter fuelled speculative buying of Chaucer, 6¾p up at 63p.

Biotech company Protherics, which has a treatment for rattlesnake bites, rose 5½p to 46¾p in response to an agreed £218.1m allshare offer from BTG, 30p down at 171p. KBC Peel Hunt analyst Paul Cuddon said: 'People would have preferred a cash offer from a big pharmaceutical player, rather than paper in a company whose shares have gone up 115pc in the last year when everything else has gone down'.

GNE, a leading owner, operator and developer of petrol stations in the UK, soared 51½p to 175p after deciding to sell its main operating subsidiary, Petrol Express, to Leopard No. 2 Investments for £51.66m. Shareholders will receive a dividend of 150p while retaining an investment in the group.

A reassuring trading update saw defence group Chemring advance 40p before profittaking left the close 27p off at 2073p. Oriel Securities is a fan. The order book stands at a record £448m and both its energetics and countermeasures divisions are delivering strong growth.