In the grey market Norwich was 339p.Among smaller merchant banks the disclosure that Cater Allen, the old discount house, had received a bid approach sent the shares bounding 121p to 562.5p.Leopold Joseph gained 32.5p to 552.5p in sympathy.The rest of the market managed to end its losing run with Footsie putting on 19.1 points to 4,576.2; at one time it was off 22.2. But there is not much in it and it would face an uphill struggle if it made a predatory strike.Abbey, which roared to 961p last month on talk of a deal before succumbing with other financials, rose 16.5p to 843.5p in brisk trading and NatWest was also busily traded, adding 9.5p to 737p.Insurance shares, awaiting the Norwich Union arrival, produced a smattering of gains with Prudential Corporation up 22.5p to 627.5p and Commercial Union 15p to 672.5p. They foundered, probably on price.Many believe, however, that NatWest is more keen on the deal than Abbey and will have to indulge in some unfamiliar sweet talk to win over the former building society.In market capitalisation terms NatWest is the bigger of the two. In the year to 31 August 1996 it had sales of pounds 15.2m and pro forma profit after tax of pounds 252,000. For the first half of 1996/97 turnover was up 13.2 per cent at pounds 10.1m and profits after tax were ahead 53.1 per cent to pounds 268,000..

Are Abbey National and National Westminster Bank talking mergers again? Shares of the two financial giants edged ahead as some speculators were prepared to bank on what would be Britain’s largest financial get- together taking place. The stock market, of course, never likes to see a good story fade away and on another uneventful day was happy to encourage the Abbey habit.
The proposed Grand Metropolitan/Guinness merger has underlined that major corporate deals are still in the forefront of City thinking and prompted the market to salivate about other possible mammoth mergers.Abbey and NatWest held talks earlier this year. The company said the money raised would provide working capital to support future growth and turnover, allow the repayment of borrowings and provide the flexibility to finance acquisitions. It is placing 1.5 million shares with institutional and other investors at 100p each, giving the company a market value of around pounds 7m. Approximately 21.5 per cent of the company’s share capital will be held by external investors.

ICI Australia will be able to exploit opportunities in paint markets internationally.. SBS Group, the information technology recruitment agency, is making a pounds 1.2m placing of shares and plans a flotation on the Alternative Investment Market. ICI Australia will own the key brands in the paint business in Australia and New Zealand, including the Dulux brand. The agreement provides that ICI Australia retain exclusive rights to use the ICI roundel (registered trademark) and the “ICI” house mark in Australia, New Zealand and Papua New Guinea for one year.

The pending sale of Imperial Chemical Industries’ 62.4 per cent stake in ICI Australia moved a step closer following agreement being reached on commercial arrangements between the two companies. “The completion of negotiations and determination of commercial arrangements between ICI and ICI Australia represents a positive result for both companies. It opens the way for the sale of ICI’s shareholding in ICI Australia and provides the platform for the development of ICI Australia,” the company said. Investors are watching for the Labor Department’s May employment report to give them a more complete picture of US job growth. That report, scheduled for release today, is expected to show the economy added 225,000 jobs last month, up from April’s gain of 142,000 jobs. The unemployment rate probably rose to 5.0 per cent from April’s 4.9 per cent, which was the lowest in 23 years..

So there is still no evidence of a cyclical slackening in labor markets,” said David Munro, chief US economist at High Frequency Economics in New York. Analysts had expected the number of new claims to hold steady at 322,000. The latest four-week average of new claims, however, has fallen from 326,500 to 323,750 “The four-week average is down. Sir Dick Evans, chief executive of British Aerospace, likes Labour’s support for Eurofighter but not its promise to crack down on arms sales.. The number of Americans filing for state unemployment benefits unexpectedly surged last week to the highest level in a month, government figures showed.