Newspaper article The Evening Standard (London, England)

Footsie Four-Year Low as Sell-Off Gathers Pace

Newspaper article The Evening Standard (London, England)

Footsie Four-Year Low as Sell-Off Gathers Pace

Article excerpt

Byline: MICHAEL CLARK

SHARE prices in London today slumped to their lowest since April 1997, just a month before Tony Blair strode up the steps of Number 10 for the first time.

There seems to be no letup for hardpressed traders, who again came under a barrage of sell orders following huge losses in share values yesterday in New York, where the Dow was left nursing a fall of 383 points. The FTSE 100 index was down 310 points to 4246.9, a fall on the week of almost 11%. All the 100 were showing losses with fund managers selling in order to raise cash. They say it has become impossible to trade the second-liners.

Merchant banker Close Brothers, which includes market-maker Winterflood Securities, looks to have dropped a packet.

Its own broker UBS Warburg says it expects Close to report a drop in pretax profits on Monday from [pound]155 million to [pound]95 million.

Marconi fell another 31/2p to 191/2p. At this level, the company is valued at a mere [pound]557 million.

Compare that with the peak of 1250p reached last year when the telecoms equipment supplier carried a price tag of [pound]35 billion.

City speculators say the odds on a bluechip company going belly-up are growing shorter by the day. Many of the strugglers are heavily in hock to the banks, which are now reckoned to be tightening up on their lines of credit following the events of the past couple of weeks.

Marconi, for instance, has debts of [pound]4.2 billion and further credit lines totalling almost [pound]2 billion. Earlier this week, it met with bankers and pleaded for more time.

Invensys was the biggest blue-chip casualty, losing a further 83/4p to a new low of 291/4p, at which price it is capitalised at [pound]1.2 billion. It stretches the fall on the week in the shares to 37p, or 56%.

The company said yesterday that it knew of no reason for such a steep drop and that it will give a trading update next month. …

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