British Biotech shares fell to 241.5p by Friday.A strange dichotomy has opened up between the new issues market, and the main market itself. More often than not, the first hint of trouble ahead is when the new issues market suffers a bout of indigestion This time round, it is the polar opposite. While new issues are turning in some sparkling performances, the markets have been nose-diving. On Thursday, KBC Advanced Technologies, as predicted in this column, was off to a flying start. From a placing price of 195p, shares in the oil refineries consultancy closed on Friday at 244.5p.
Likewise, the Internet book seller, Bookshop.Co.UK, placed at 100p on Ofex by stockbroker Shaw & Co, doubled, closing the week at 200p. Finally, London Bridge Software surged to 265.5p, from a placing price of 200p.Confused? You will be if after reading the proposed acquisition and working capital document from Bakyrchik Gold (198.5p) At first glance it seems hideously complex It remains so on a second reading. Even the advisers admit to a bizarre structure, necessitated in part by the demands of the Kazakstan government. Bakyrchik aims to increase its stake in its Kazakstan gold reserves from 40 per cent to 85 per cent, by buying out the government's stake. There is an element of a gun to shareholders' heads in the letter from Bakyrchik chairman Gordon Toll: "In the situation that both resolution 1 and 2 are not approved by Shareholders, the Company will be forced to seek immediate re-financing.
If alternative sources of financing were not available the Company would have to cease trading." So there you have it. The cause of the importuning tone is down to the complex, not to say fraught negotiations that have been taking place behind the scenes with the Kazakstans. But underneath the complicated design, it is slightly more straightforward. Working capital being provided by IndoChina, Bakyrchik's largest shareholder, is needed to keep the project going Banks won't lend on a risk project of this nature.
The shares have been on a roller coaster ride, but the project continues to have potential. There is no immediate call for cash from investors, although the extraordinary general meeting called for 10 April will also seek approval to issue further shares. For shareholders who remain confused: do as Mr Toll urges, and vote for resolutions 1 and 3.On Monday, full year results from Capital & Regional are expected to continue the trend of the last few years, with net asset value, and pre-tax profit set to continue on an upward trend. Analysts forecast profits will come in at pounds 4.8m-pounds 5.2m, net asset value of 217p-220p per share.