Any bank issuing such a warrant would have to hedge their position - hence the reports of Swiss banks vacuuming upIntertek stock.Cynics, however, dismissed the story as the product of commission-hungry brokers looking to drum up business for themselves during an otherwise quiet day in the City.The wider FTSE 100 rose 30.6 points to 5,213.4 while the FTSE 250 dropped 34.1 points to 7,500.8.ICI gained 1.25p to 280p as Morgan Stanley tipped shares in the chemicals group as being "too cheap to ignore". Warrants allow investors to cash in on a rise in a share price with a relatively small outlay of capital. The downside to warrants is that they are valid for only a set time period, after which they become worthless.The implication of yesterday's tale is that the group of warrant investors are expecting a sudden jump in Intertek's shares some time soon and are looking to cash in on it, while at the same time benefiting from the anonymity clients of Swiss banks traditionally enjoy. Yesterday, dealing rooms were awash with talk that Swiss banks had been gobbling up Intertek stock. According to the story, a group of investors approached a number of Swiss banks this week and asked the banks to issue them with Intertek warrants. The other two are Bharat Sanchar Nigam and Reliance Infocomm. Hutchison Whampoa, which owns the "3" mobile phone brand in the UK, also has a presence in India but does not yet have a nationwide coverage.
In the 12 months to the end of March, Bharti had revenues of about £980m and net profits of £184m.Although Vodafone, the world's largest mobile group, is only buying a 10 per cent stake in Bharti, it is receiving two seats on the company's board and will have rights to approve the company's business plan. This, said Vodafone, would give it significant influence over Bharti's strategic development.The stake would also allow it to influence Bharti's dividend policy, once the company starts making distributions in the next few years. Switzerland's Soci? G?rale de Surveillance was said to be interested in buying Intertek and the speculation was enough to cause heavy demand for the shares. So why the volatility at Intertek? On Thursday, bid chatter surrounded the group, which tests goods ranging from textiles and chemicals to toys.
Shares in the group touched a low of 686.5p and a high of 715p during the session, and settled at 710p, up 6p on the day. As I said at the time, looks like years of underinvestment in the brand to me. Don't say you weren't warned.j.warner independent.co.uk. For a second day, market professionals reported turbulent trading in Intertek, the British quality-control specialist. Mr Kipling may make exceedingly good cakes, but it doesn't seem to have done the sales any good They fell 12 per cent in the first half. The shares slumped nearly 10 per cent yesterday, taking them back through their flotation price.