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Electricity supplier Scottish and Southern Energy (SSE) has got round the credit crunch by asking shareholders to dig deep into their pockets for almost £450 million.
Today its shares fell 101p to 1162p as brokers Credit Suisse and Merrill Lynch began a bookbuilding exercise in around 40 million shares at a discounted range of between 1100p and 1125p. SSE wants the cash to make acquisitions it has identified without going cap in hand to banks.
It says the new shares being issued are the equivalent of up to 5% of those currently in issue. The extra cash will provide an additional source of funding aside from the £6.75 billion already earmarked for the next five years.
The new shares will also have rights to SSE's interim dividend of 19.8p declared back in November. The company is on track to pay a full-year dividend of 66p for the year to 31 March.
Other utilities to be marked lower included National Grid, down 47½p at 663½p, and Centrica, 10¼p at 266¾p.
Drax, Europe's biggest coal-fired power generator, fell 10p to 621½p after UBS cut its target from 625p to 600p, while continuing to rate the shares at neutral.
Pennon, down 21½p at 530p, will replace British Energy, 2p off at 771½p, as a constituent of the Footsie 100 following its takeover by EDF of France.
Share prices paused for breath following their positive start to the New Year. Dealers said some investors had chosen to take profits, which will come as good news for market-makers short of stock. The FTSE 100 index fell 92.1 to 4546.8. That compares with the 4434.2 level at which it ended 2008.
BP fell 22½p to 532p despite the company denying it had guided brokers' forecasts lower following the collapse in the oil price from a record $147 a barrel struck back in July.
Brokers are gloomy about the outcome for the fourth quarter of 2008.
Singer Capital Markets says BP's profits will be hit harder than most by the falling oil price because of its exposure to Russian crude oil prices through its TNK-BP joint venture. The average cost of a barrel of oil in the fourth quarter was $55.48, while in Russia it was down at $20 because of high export tariffs.
ING says BP is ripe for profit-taking following a strong performance by the shares and poor finish to 2008. Every dollar drop in a barrel of oil cuts operating profits by $400 million.
A sigh of relief from brokers accompanied the Christmas trading update from Marks & Spencer. The shares responded with a rise of 7¾p to 246½p.
Pali International said the outcome was not as bad as feared, but Cazenove has cut its rating from outperform to in-line, while Panmure Gordon has jack-up its target from 250p to 300p. JP Morgan warns there could be a cut in the dividend later this year.
Citigroup has raised its price target for Next, down 9p at 1218p, from 900p to 1000p in the wake of yesterday's trading update, which showed a 7% drop in like-for-like sales.
The broker reckons 2009 will be a difficult year for the clothing retailer with further margin deterioration. It continues to rate the shares a sell. UBS has upped its target for Next from 1175p to 1250p.
Citigroup has raised Debenhams, 1¼p firmer at 35½p, from sell to hold based on valuation and repeated its 35p target.
The UK's biggest hedge-fund operator, Man Group, fell 26p to 261p after UBS cut the shares from buy to sell ahead of next week's trading update. It is worried about the growing level of redemptions and the effects of further deleverage. It has also cut its target from 315p to 260p.
The bears continue to feel the squeeze at private-equity investor 3i Group, with the price rallying a further 36¾p to 379p. The shares, which continue to trade at a hefty discount to their net asset value, were sold during the run-up to Christmas.
