Housebuilder Berkeley has fallen sharply after around 15% of the company's shares was placed at a deep discount last night.
Citigroup sold 16.1m shares at 701p each to exisiting shareholders, and traders said the stake was part of the 28% shareholding owned by troubled Saudi group Saad. The Saudi bank last week reportedly froze the bank accounts of Saad founder Maan al-Sanea.
Berkeley has fallen 80p to 745p - a 9% drop - leading the mid-cap losers. Earlier this year Saad supported a £50m placing at 840p a share designed to help the company buy more land when it became available.
Meanwhile banking group HSBC, where Saad holds around 3%, is down 11p at 512.5p. HSBC's shares came under pressure last week on talk that Saad might sell down its holding although a spokesman for the Saudi group was reported as denying this.
Overall the market has edged higher in early trading, with the FTSE 100 25.44 points better at 4430.66. The FTSE 250 is up 46.16 points at 7734.02.
Lloyds Banking Group has climbed 2.6p to 63.7p amid talk it is to cut 1,500 jobs and close all its Cheltenham & Gloucester branches.
Miners have recovered from yesterday's falls, with Antofagasta up 13p at 656p and Eurasian Natural Resources Corporation up 14.5p at 668p.
Elsewhere GKN, the automotive and aerospace manufacturing group, jumped 14.5p to 137.25p as Merrill Lynch upgraded from neutral to buy and raised its price target from 110p to 155p. Merrill said the company's major market, automotive, was showing signs of stabilisation. The company's shares have been hit by concerns on financing, and Merrill suggests a rights issue might be on the way. The bank said:
"We believe market concerns on the balance sheet are one reason for recent share price volatility, as GKN seeks to refinance a £350mn revolving facility due in July 2010. We think that GKN is unlikely to breach its covenant
"Management is committed to addressing the refinancing by the first half results on 8 August. We see a rights issue as probably the best solution, allowing GKN to reduce its high level of financial gearing, improve its credit rating and its appeal to equity shareholders."
