One story doing the rounds of the City talked of a bid for the furniture retailer, possibly a management buyout. “Current industry trading appears to be strong and we believe that William Hill will sooner or later return cash back to shareholders either via a share buy-back or a special dividend,” said Merrill Lynch. Market professionals poured cold water on such gossip, arguing that a move on the company is very unlikely before MFI publishes its post-Christmas trading statement. The period after Christmas is the most important part of MFI’s year.

The US broker also raised its 2003 pre-tax profit forecasts on the bookmaker to £171m from £141m.MFI jumped 5.25p to 141p as dealers reported “hot money” moving into the stock. Nick Batford, a technical analyst at the broker Tradition, predicted at the start of trading yesterday that if RSA closes above 80p, a key resistance level, the stock should make strong gains in the coming days. It did and he now urges investors to buy into RSA.William Hill added 7p to 407p after Merrill Lynch upgraded its recommendation to “neutral” from “sell”, citing signs of strong trading at Britain’s second largest bookmaker. Elsewhere, bid talk circled Kesa Electricals, up 10.75p to 258.75p. Dealers reckon rival Dixons, down 0.25p to 132.75p, is the most likely to make a move on the group, should such a scenario unfold.Technical traders moved into Royal & Sun Alliance, up 1.25p to 81.25p. However, most in the market remain confident BG will achieve growth going forward. Tony Alves, an oil industry analyst at Investec Securities, expects the group to achieve production of 460,000 barrels of oil next year, up from 430,000 this year.Shire Pharmaceuticals put on 13.25p to 505p amid suggestions the group’s Adderall treatment for attention deficit disorder is showing signs of winning market share.

The company said the recent disposal of its Bacton assets in the UK and the setbacks at its Karachaganak operation in Kazakhstan will have slightly held back group earnings.Deutsche Bank cut its fourth-quarter earnings-per-share forecast to 5p from 5.2p after the new guidance. However, word soon spread that things were nowhere near so bad at BG and investors quickly returned to the group’s shares, which ended just 2p lower at 276.5p.BG is believed to have merely contacted a few City brokers, who it felt were over-optimistic about the company’s prospects for the final quarter of the year, and urged them to temper their expectations. Cheap at half the price.m.harrison independent.co.uk. Shares in BG Group experienced a rollercoaster ride yesterday as rumours the company was aggressively talking down its forecasts sent the stock plummeting, only to recover most of its losses by the end of the session as investors learned the truth was somewhat less dramatic. In which case the tax payer will pick up BE’s eight UK stations for £1 a time.