In­vestors ditch lurch­ing Rolls-Royce

The Daily Telegraph - Business - - Business - Louis ash­worth

COL­LAPS­ING in­vestor con­fi­dence shaved an­other 14pc off Rolls-Royce’s share price yes­ter­day, as the en­gi­neer’s Covid-19 agony con­tin­ued.

The en­gine-maker, which has taken a se­vere hit amid a pan­demic-in­duced cri­sis in the global avi­a­tion sec­tor, fell 34.4p to 206.7p, leav­ing it down 70pc this year.

An­a­lysts at Credit Suisse said Rolls-Royce’s plans to un­der­take £2bn in dis­pos­als was likely to re­duce the need for it to raise money by sell­ing shares, but warned of volatil­ity in its fore­casts and a lack of vis­i­bil­ity on its bal­ance sheet.

They cut their price tar­get on the group, which last week re­ported a £5.4bn loss for the first half of 2020.

Rolls-Royce had a fa­mil­iar com­pan­ion among the FTSE 100’s big­gest fall­ers – Bri­tish Air­ways-owner IAG dropped 13.8p to 202.5p amid a gen­er­ally poor show­ing for travel shares. The group took a knock amid signs Por­tu­gal could soon be added to Bri­tain’s quar­an­tine list. Adding to its woes, JPMor­gan an­a­lysts cut their rat­ing on the group to “neu­tral”.

It was a poor day for the FTSE 100, which caught up with Europe’s losses on Mon­day and then added some of its own, sig­nif­i­cantly un­der­per­form­ing a largely flat set of con­ti­nen­tal in­dices.

Min­ing com­pa­nies were the big­gest bright spot among Lon­don-listed groups, with heavy­weights such as BHP, An­glo Amer­i­can, Glen­core and Antofa­gasta all jump­ing as pur­chas­ing man­agers’ in­dex fig­ures from around the world showed fac­to­ries ex­pe­ri­enc­ing huge jumps in de­mand.

Gold miners shone across the board, as the metal’s price con­tin­ued to push back to­wards $2,000 an ounce. Fres­nillo was the FTSE 100’s big­gest riser, climb­ing 57.5p to £13.20, while Poly­metal also rose and Hochschild gained group among mid-caps.

On the FTSE 250, fur­ni­ture and home­wares re­tailer Dunelm climbed 62p to £14.91, af­ter it said sales had been “strong” over the past two months, leav­ing its year-to-date per­for­mance “ma­te­ri­ally ahead” of its ini­tial ex­pec­ta­tions. Year-on-year sales growth dur­ing July was at 59pc, which the FTSE 250 group at­trib­uted to pent up de­mand and the tim­ing of its sum­mer sale. Sales were up 24pc in Au­gust.

Royal Bank of Canada’s Richard Cham­ber­lain said the group has “been able to ben­e­fit from the work­ing-fromhome trend this year.”.

Yes­ter­day’s clos­ing prices will be used to de­ter­mine the move­ment in the lat­est reshuf­fle of Lon­don’s main mar­ket, in­clud­ing move­ments in and out of the FTSE 100. Broad­caster ITV’s fate was sealed with a fur­ther drop of 3.7p to 57.1p. Al­ready by far the small­est com­pany among Lon­don’s blue-chips, its place is most likely to be taken by B&M Euro­pean Re­tail. The of­fi­cial de­ci­sions will be an­nounced af­ter the close to­day, with the re­sults set to be im­ple­mented on Sept 21.

Newspapers in English

Newspapers from UK

© PressReader. All rights reserved.