Vodafone buoyed by bank 'no sale' pledge

MOBILE phones giant Vodafone helped turn the market round today after one of its biggest shareholders vowed not to sell its shares when free to do so tomorrow.

Spain's Banco Santander Central Hispano indirectly acquired the 1.84 billion shares (2.7%) when it swapped its 31% stake in Airtel last summer.

The ending tomorrow of a lock-in on a total of 3.1 billion Vodafone shares owned by seven banks, including Banco Santander, led to fears that shares would flood the market.

But the bank reassured the London market by saying it would hold on to its stake.

Vodafone responded by clawing back an early fall to trade 4 1/2p dearer at 150 1/2p after briefly touching a new low of 141 1/4p.

The news will come as welcome relief for one of its newest shareholders, Dutch broking firm ABN Amro, sitting on a sizeable loss only a week after spending 129 million on 80 million shares.

The broker paid 161.3p a share for its stake but, with the price continuing to fall, it has now made a loss, excluding charges, of 8.6 million. Vodafone has lost more than 15% of its value since announcing full-year results at the end of May, with the company's stock market valuation dropping below 100 million at one stage.

The price touched a peak of 399p, giving Vodafone a tag of almost 250 billion, when it acquired German phone company Mannesmann last year, but fund managers have become disenchanted.

The sudden turnaround in the Vodafone price enabled the rest of the market to reduce earlier falls. The FTSE 100 index, down 88 points at one stage, bounced back to reduce the deficit to 18.2 to 5589.7.

Carphone Warehouse rose 5 1/2p to 153 1/2p on the back of an an upbeat trading statement that came as a pleasant surprise to the City. There were fresh losses among the banks ahead of the dividend- reporting season. HSBC was down 10 1/2p at 826 1/2p and Halifax off 8p at 807p. Barclays fell 22p to 2192p and Royal Bank of Scotland lost 34p to 1639p but broker Credit Lyonnais Securities is urging clients to buy them, claiming recent selling has been overdone.

Whitbread fell 13p to 661p after Deutsche Bank downgraded from buy to market perform. Lattice added another 3 1/4p to 157 1/4p following the better-than-expected outcome to the pricing review conducted by the industry regulator. Broker UBS Warburg has raised its recommendation on the shares from buy to strong buy and its target price from 184p to 216p.

Easynet came back from suspension 12 1/2p better at 440p following the reverse takeover by Marconi, 11p lower at 226p, and news of a major fundraising exercise. Marconi has reversed its Ipsaris subsidiary into Easy-net in return for 82.9 million shares, or 70% of the company. That stake will drop to 60% once Easynet completes a placing of new shares designed to raise an extra 50 million of working capital.

A bullish trading update lifted Fibernet 50p to 347 1/2p. The communications specialist for big businesses said it was seeing a high rate of renewals on its three-year and four-year service contracts. Sales in Germany were particularly strong and the company still has 100 million in the bank.

It was the first day of dealings on AIM for GW Pharmaceuticals following a placing by broker Collins Stewart at 182p. The company, which develops cannabis-based treatments, touched 205p before settling at 186p, a premium of 4p.

lPrices and indices in this section are supplied from various sources and calculated at different times and may not always match those listed in the tables. Ofex prices relate to the previous close.

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