MKS

Market report: Wednesday 13.45
Mickey Clark, Evening Standard
28 December 2005

SHARES in Marks & Spencer, Britain's biggest clothes retailer, climbed above 500p today, for the first time in more than seven years.
They rose 8¼p to 506¾p, bringing festive cheer to those loyal shareholders who could have been forgiven for cashing in their chips after billionaire Philip Green's 400p-a-share offer was rejected last year. Companies like M&S and John Lewis have enjoyed booming sales in the run-up to Christmas. John Lewis says sales grew by almost 12% in the month to Christmas Eve.

This flurry of activity in M&S shares is also a feather in the cap of chief executive Stuart Rose, who was parachuted in to revive the ailing stores group's fortunes, with profits having been in decline for a number of years. Some brokers say the dramatic rise in the shares, which are up from a low of 330½p in May, is a reflection of the City's confidence in Rose's ability.

One of those being rewarded is US investment house Brandes Investments, which at the last count had 15% of the stock. Brandes, one of the big investors that supported Green, now appears to be sitting on an extra £265m profit from its investment. That would not have been the case had it accepted Philip Green's terms.

Other retailers making their mark with investors were J Sainsbury, up 4½p at 321½p, Matalan 3¼p better at 181½p, Burberry, ahead 5¾p at 416¼p, and WH Smith, gaining 5p to 426p.

Share prices generally ticked better in thin trading. They tentatively climbed back above 5600 for the first time since July 2001, despite Wall Street suffering its biggest one-day fall for two months. New York investors are fretting about bond prices, yields on 10-year notes having fallen below those on two-year notes for the first time in five years, indicating that a US economic recession beckons. In London, the FTSE 100 index rose 20.5 to 5615.9.