Sharewatch – W/E 25/04/97

The demerger of Cordiant last Monday initially provoked a positive effect on the global advertising group’s share price, with a rise of 7p to 137p shortly after the move was announced. This was not sustained however and by Wednesday it had fallen to 131.5p, remaining at this price for the rest of the week. Press reports indicated that most of the City believed the demerger was mainly aimed at appeasing shareholders and did not have the long-term interests of the group in mind.

Other agency news during the week was WPP’s announcement that on a like for like basis revenues in the first quarter had risen 6%. It also announced that it was taking a stake in the London-based digital media company Syzygy. This increased the group’s share price slightly throughout the week, finishing at 254p on Friday, up 3.5 on Monday’s close.

The City was unimpressed with BSkyB, despite a report by HSBC James Capel which predicted that BSkyB would become the dominant programme supplier if the Bristish Digital Broadcasting Consortium won the terrestrial TV bid. The satellite broadcaster fell throughout the week from 579.5p on Monday to 577p on Friday.

Rumours that United News & Media would be buying into S4C’s Digital Networks, the Welsh channel’s digital terrestrial TV bid, increased United shareprice on Wednesday by 7.5 to 739p, though it fell 1p on Friday. The ITC remains undecided about the date when it will decide who will win the licence for the digital terrestrial commercial TV licence.