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WE'RE DAN FOR; Shares slide is not comic.

Byline: ANNIE BROWN

YOU know things are bad on the stock market when even Desperate Dan has to take it on the chin.

The FTSE 100 index of Britain's biggest companies fell below the magic 5000 mark yesterday for the first time in nearly three years.

And the tycoons of the Thomson family, owners of Dan, Oor Wullie and The Broons, are among the big losers in the recent shares plunge.

The Dundee-based dynasty behind the Sunday Post is the fifth-richest family in Scotland, but their investment portfolio has fallen in value by nearly pounds 200million since January.

Yesterday's mayhem in the City showed there could be even worse to come for the Thomsons and plenty of others.

Scotland's biggest industrial firm, ScottishPower, also had a grim day. At one point, the company's value was falling by pounds 21million per minute.

But it's not just the fat cats who suffer when the FTSE falters. A falling stock market affects people with private or company pensions, ISAs or endowment mortgages.

Sceptics fear it could be five years before small investments start to grow faster than inflation again.

The FTSE 100 index has lost 25 per cent of its value in a year.

Experts had warned that a fall below 5000, a figure always seen as a landmark, would spread even more panic in the City.

And yesterday, it happened. At one point, the 100 index slid to 4909 - a drop of more than 160 points and its lowest level since October 1998.

The slump saw about pounds 40billion wiped off the value of the UK's biggest firms.

Investors in London were reacting to dismal US employment figures and falling share values in Japan and Hong Kong.

The City had already taken a hammering on Friday, after a 235-point collapse in New York's Dow Jones average.

It's all far from Dandy news for the Thomsons.

The value of the family's assets has been put at pounds 500million, but the true figure including property could be closer to pounds 1billion.

The Thomsons have always made more money from their outside investments than from the publishing company that produces their comics and newspapers. One fund manager said: "I am sure other Scottish family dynasties dabble in the market, but not to the extent the Thomsons do."

The family lost pounds 191.8 million on its financial investments between January and August, according to recent research.

Much of the pain came from their pounds 58million stake in struggling TV company Carlton Communications, which will drop out of the FTSE-100 this week. But the Thomsons' troubles seem tiny compared to those of ScottishPower.

Over one hour of trading yesterday, the energy giant's stock market value plummeted by more than pounds 1.2billion to pounds 7.614billion.

Stockbrokers pressed the panic button when ScottishPower announced a pounds 200million loss as a result of collapsing American electricity prices.

The Glasgow-based firm's share price rallied later. But by then, the damage had been done.

A leading Edinburgh stockbroker said: "It must have been a real horror show for ScottishPower bosses.

"The firm has got away with a series of grim announcements in recent months. And it really only has itself to blame.

"It expanded into America telling everyone it was going to make huge profits.

"But it simply has not worked out that way, and now the company is paying the price for a poor investment."

ScottishPower claimed the pounds 200million hit suffered by US subsidiary PacifiCorp would draw a line under its troubles across the pond.

Bosses hoped America would prove a goldmine for them, but problems there came to a head when one of the company's biggest power stations gave up the ghost.

The plant in Utah was out of business from December to May, forcing ScottishPower to buy in electricity at higher prices from rivals.

By close of trading yesterday, ScottishPower shares had fallen 53p to 426p - a loss of more than 10 per cent of the firm's value. Bosses refused to comment on the decline.

Another giant with Scots connections, the newly-merged Halifax and Bank of Scotland, did well despite joining the market on such a difficult day.

Its shares opened at 834p and ended on 860, good news for the three million small investors with stakes in the new business.

Analysts expect the shares to rise to around 900 soon, but up to 2000 employees are still set to be axed as part of the merger.

The huge deal announced in May has created Britain's fifth-largest UK bank, with 1150 branches and around 56,000 staff.

Recent jumps in the two companies' share prices have pushed the combined group's market value to around pounds 30billion, making it the 10th-largest firm on the stock exchange.

There were few other bright spots to cheer investors yesterday.

But the market did pull back from the edge of the abyss as bargain-hunters moved in to snap up cheap shares.

London was also helped by a strong opening in the US, with the Dow Jones Industrial Average ahead by 50 points at late afternoon.

The FTSE 100 rallied to close 36.6 points down, at 5033.7.

And with some analysts predicting better things to come next year, it looks like the Thomsons may be able to keep Desperate Dan in cowpies for some time to come.
COPYRIGHT 2001 Scottish Daily Record & Sunday
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 2001 Gale, Cengage Learning. All rights reserved.

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Publication:Daily Record (Glasgow, Scotland)
Geographic Code:4EUUK
Date:Sep 11, 2001
Words:888
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