Merger speculation boosted the banking sector today as investors sought to cash in on a possible alliance between Barclays and NatWest.
This follows reports of secret talks between Barclays and theGovernment over possible clearance for the deal. At the same time finance union BIFU warned that 20,000 jobs were at stake if the move goes ahead.
NatWest surged 35p to £11.75 with Barclays lifting 39p to £19.25 as the FTSE-100 Index improved 23.4 points to 5,605.7 by mid-morning.
The rest of the banking sector was moving forward with Lloyds TSB up 30p to903p, Halifax up 3p to 907p and Woolwich up 4p to 373p.
Abbey National gained 10p to £11.94, Northern Rock solidified 4p to 647p andAlliance & Leicester was unchanged at 892p.
The lacklustre start came as Eurotunnel reported its annual results and saidit was on track to break even by the year 2003.
The Anglo-French company reported a sharp fall in its overall losses for 1997,down from £685m in 1996 to £611m, but after stripping out its hugedebts it made an operating profit.
Eurotunnel fell back after an initial rise and was level-pegged at 67p.
Scottish & Newcastle agreed to buy 311 pubs from the Grand Pub Company for£206m in a move that took the group a step closer to achieving its goalof becoming a managed pub estate. S&N frothed 12p to 850p.
Rentals group Thorn announced a profits warning on top of a shake up in theboardroom with the appointment of a new chief executive.
The company, which runs Radio Rentals, Crazy George’s and rental phone serviceDER Direct, said financial director Steven Marshall would immediately replaceMike Metcalf who has run Thorn since 1991.
Thorn, however, fell 9p to 146p.
PA News 16/02/98
