A wave of high expectation in the City has boosted the share price of a number of media companies such as Reuters, BSkyB and Mirror Group

A week of high expectations has pushed media stocks well, with a subsequent softening of share prices as dealers took profits. As the weather grew torrid, there was precious little evidence that market traders had sold in May and gone away. If anything, the media sector has kept them sweating at their screens rather longer this year than they are used to.

This was particularly the case with Reuters, which has out-performed the market by 30 per cent over the past six months. Sound growth of 15 per cent had long been anticipated. However, the City got wind of something extra in its forthcoming annual results and shares soared, before settling back from the 550p peak as shareholders cashed in.

BSkyB’s shares were similarly ballistic, hitting a high for 1995, at 309p. They rose six per cent in two days, partly on speculation that a deal had been struck with the Office of Fair Trading over links with cable companies. BSkyB has also poached the head of ITV Sports – enough to impress the City during the silly season.

Shares in Mirror Group were actively traded as the cover prices of the Sunday Mirror and The People were raised by 5p, signalling to the market that the price of the flagship Mirror may also rise. The City appears to believe that circulation will survive the increase – shades of New Labour penetrating the Square Mile – and shares are trading around their high for the year at 152p.

Demerger speculation continues to enhance the value of Thorn EMI shares, which have hit 14, having started the year at 10.35.

Bid rumours gave a fillip to Manchester-based Metro Radio’s quote. From a low of 395p, they have hit 570p, making some traders very happy in a difficult market. In contrast, Pearson’s shares fell after a profits downgrade.

Another faller was Trinity International, which announced a rights issue to finance its purchase of Thomson’s regional English newspapers. Shares in the latter were commensurably boosted, putting on 20p at one point to close at 865p. This was not solely to do with the Trinity deal. Thomson has also let it be known that it is looking for a purchaser for The Scotsman – news which appeals to the City.

It is one of the small amusements of City life these days that a newspaper group that is selling its newspapers actually rises in value.

George Pitcher is joint managing director of media consultancy Luther Pendragon.