Weekly stock market report

A bid would be a neat exit for WHSmith shareholders, who haven’t had much to celebrate in recent years. The company’s drive into the US market has been an abject failure, and it is under attack from all sides back home. Supermarkets like Asda and Tesco are undercutting it on things like CDs and stationery, while specialists are winning market share in things like books.

Kate Swann, a highly-regarded manager poached from Argos, took over as chief executive late last year with a remit to look at the group’s entire strategy. Now, it looks as if her main job will be to extract an attractive price from Permira.


Shell lost a third senior executive, another 300m barrels or so of reserves and its cherished AAA credit rating this week. Judy Boynton, finance director, has ‘stepped aside’ following a damning report into the company’s failure to categorise its reserves properly. Her departure follows those of Sir Philip Watts, formerly chairman, and Walter van de Wijver, head of exploration and production. The latter has been attempting to distance himself from the events surrounding the crisis.

Shell’s share price has stabilised, however. Investors aren’t really interested in the months of legal pantomime farce that will doubtless follow the publication of the report, which featured some astonishing email exchanges between senior managers. They are satisfied that the company has no more bombshells to drop, they have three senior heads on platters, and they are confident that the long process of reforming Shell’s cumbersome management structure has started. Case closed.

There were more reams of comment this week on prospects for the residential property market. Regular readers will know our views on that topic: namely, that a fall in prices is a matter of when, not if. But one area where market prospects are recovering is in City of London office space. After a dismal couple of years characterised by retrenchment among financial institutions, there are clear signs of improvement. Land Securities is apparently close to letting a big chunk of its Gresham Street development to Lloyds TSB, while over at Canary Wharf, CSFB has decided to withdraw a quarter of a million square feet of space from the subletting market. Among quoted companies, major winners would be Land Securities, British Land (owner of the Broadgate development around Liverpool Street station) and Minerva, which plans to build the City’s tallest tower by 2008.

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