BT slides on warnings it pays too much for sport
SHARES in BT dipped yesterday amid fears the telecoms giant was overpaying for content on its sports channels.
It was among the biggest losers in the FTSE 100, behind only Anglo American and British supermarkets taking a hammering from Amazon’s shock decision to buy a food chain.
After closing the previous day at 294p, BT shares fell by as much as 2.2pc, or 6p, in early trading on Friday but recovered to 291.1p.
An analyst note from Louis Capital warned there were ‘risks everywhere’, claiming the company was spending too much on TV rights for football and was under continued pressure from regulator Ofcom over its Openreach fibre cable business.
It also highlighted a growing pensions deficit and a slowing of customer growth, after reports that fewer fans were watching games live on television.
Analyst Saeed Baradar speculated BT was on course for another profit warning, after one was issued in January, adding: ‘There is still much pain to come.’
Meanwhile, investors continued to ditch Anglo American shares after changes to mining regulations in South Africa. Shares in the multinational have plunged 9pc this week and closed on a 37week low of 967.3p yesterday.
But despite this and panic surrounding Amazon’s deal with Whole Foods Market, the FTSE
100 recovered Thursday’s losses. The index was up by 0.6pc, or 44.18 points, at 7463.54 as markets closed, although this was down by 0.85pc on the end of last week.
UK oil companies helped drive the figure up, off the back of Brent crude’s price rising to $47.20 a barrel. Shell shares rose by 1.6pc, or 33p, to 2160p and BP was up 1.2pc, or 5.7p, to 466.5p.
Accendo Markets chief analyst Michael van Dulken said: ‘The rebound at 10am lost momentum but was still holding at above 7450 and that bodes well for Monday. It was really being held up by BP and Shell and defensive stocks.
‘You have got Brexit negotiations starting on Monday and we technically do not have a government yet, but that’s a positive message from markets – that they do not see much risk.’
The FTSE 250 also closed with an increase of 0.2pc on last week, edging up to 19816.39.
Winners included aerospace group Cobham, which saw shares rise 5.5pc, or 7.1p to 136.5p, ahead of next week’s Paris Air Show where several major deals are expected to be announced by big companies. Private healthcare provider NMC Health’s stocks jumped 5.6pc, or 126p, to 2371p despite some brokers downgrading it from ‘buy’ to ‘hold’.
Last week its billionaire boss, Dr Raghuram Shetty, 74, cashed in more than 2m shares and made £47.4m. Meanwhile, one of the biggest drops was in shares in London-based Kaz Minerals, which recently announced refinancing of its debts. Shares were down 2.5pc, or 12p, to 471.5p.
Gambling operator Rank Group, which posted rises in digital revenues last month, yesterday saw its shares rise by 8.7pc, or 19.5p, to 243.5p. Brokers reiterated recommendations to ‘buy’.
Shares in Booker Group fell 3.6pc, or 6.9p, to 185.5p. It comes after Tesco announced a £3.7bn takeover bid of the wholesaler, which is opposed by two of Tesco’s biggest shareholders, and in the past month Booker shares have fallen 6pc.
Hargreaves Lansdown analyst Laith Khalaf said: ‘The proposal to take over Booker still raises concerns, particularly given the shaky backdrop.’