Highway shares puzzle

Is now a good time to sell shares in Highway Insurance? That's what one activist investor thinks.

Dealers noted that North Atlantic Value, the investment vehicle of Chris Mills, has reduced its holding in the insurer to 5.74%. Some traders say Mills is a savvy investor, recalling that he did particularly well out of his holding in ports operator Simon Group.

Highway's shares have also put in a strong performance and are now trading at 73p -- a five-year high. However, one dealer noted that although it may be tempting to follow the tactics of Mills, he has been selling Highway shares in recent months, and the stock has continued to move higher.

Takeover speculation also returned to Prudential, trading at 570p. Hopes it could be taken private flared up after Prudential appointed Goldman Sachs in place of JPMorgan Cazenove as broker.

Dealers interpreted this move as a way to protect itself against rumoured predator Aviva.

They said that Goldman Sachs is renowned for its aggressive defence strategies. Aviva is trading at 721p.

Meanwhile Alea Group slumped to an all-time low of 64p after the troubled insurer announced its run-off strategy. Alea floated on the London Stock Exchange at 250p in November 2003.

' Yvette Essen is stock market reporter and insurance correspondent for The Daily Telegraph