January 11: LSE shares hit record highs

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January 11: Both stocks at the centre of the two main bid stories in London – P&O and the London Stock Exchange – are up sharply today on hopes that each will receive higher bids.

P&O is up 5.6 per cent at 495p – far above the 470p tabled on Wednesday by Singapore’s PSA International and way ahead of the 443p offered by Dubai’s DP World. Analysts at Dresdner Kleinwort Wasserstein are talking about the bidding getting up to about 550p. We’re looking for fresh lines.

LSE shares are up 6 per cent at 652½ p – a record and miles above the 580p offered by Australia’s Macquarie Bank. The price is also being supported by the strong trading update the exchange issued last night. Here, too, we are chasing fresh lines to take the story on.

Rick Haythornthwaite, former chief executive of Invensys, has resurfaced as joint managing director of Star Capital, a private equity house which focuses on infrastructure investments and has made some PFI investments. Invensys shares, incidentally, are up more than 6 per cent - the second day in a row it has risen strongly. Odd.

Otherwise, this morning’s conference was dominated by the large number of trading statements, especially from retailers, housebuilders and construction companies. The housebuilders are trying to believe, and urging everyone else to believe, that 2006 is looking much better than last year. So far, investors seem reluctant to believe them. Construction seems to have been buoyed by public sector investment. The main companies updating the market today are Taylor Woodrow, Bovis, Savills, Balfour Beatty and Costain.

And retail is a very mixed picture. Body Shop, which had seemed to be recovering, looks ghastly (shares off 17 per cent). Morrisons looks alright (the Mail said this morning that Tony DeNunzio, ex-Asda, was in line to be the chief executive). Matalan was disappointing. Peacock, which leaves the market on Friday after being taken over, continued to do well. Burberry looks fine, if unremarkable.

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