Hedging bets goes wonky
SECRETIVE City wheeler dealers have had their fingers burned after Morrisons posted a jump in sales yesterday.
Hedge funds had been banking on making fat profits from a slump in the supermarket chain’s share price.
Instead, the stock has soared 23% since mid-March, reaching a nine-month high.
Yesterday the Bradford-based business announced a 3.6% rise in quarterly sales, split evenly between its own stores and its growing wholesale arm.
Boss David Potts said the launch of wonky fruit and vegetables had also proved a hit. It has been selling around 1,400 tons of Wonky produce per week.
Morrisons’ share rally comes despite fears it could be hammered by a proposed merger between Sainsbury’s and Asda. Potts refused to comment on the deal but said: “We welcome vigorous competition. It is an important part of British retailing.”
There has been talk Morrisons could itself be involved in a takeover, with Amazon – with which it has a wholesale deal – mentioned as a possible suitor.
Filings show three US hedge funds have upped their “short” positions in Morrisons since February – meaning they borrow shares in the hope they will fall.
But Nicholas Hyett, analyst at broker Hargreaves Lansdown, warned: “The outlook for Morrisons is perhaps not as rosy as first glance would suggest. The sector has got more competitive and Morrisons is caught right in the middle of it.” up 38.5 at 7700.9 Ferguson 5660.0 +46.0 GKN 473.9 +0.9 GlaxoSmithKline 1477.0 -1.6 Halfords 375.0 +0.2 Hays 185.8 +0.7 HSBC 731.7 +12.2 Imperial Brands 2795.5 +15.5 International Airlines Grp693.2 -1.2 ITV 160.4 +9.2 Kingfisher 297.3 +9.0 Land Securities 976.1 -5.5 Legal & General 280.0 +0.8 Lloyds 66.9 +0.3 Marks & Spencer 293.8 +0.6 Morrison 251.6 +6.2 National Grid 843.9 -0.4 Next 5568.0+322.0 Old Mutual 260.9 +5.9 Pearson 920.4 +6.2 Prudential 1932.0 -2.5 Reckitt Benckiser 5732.0 +6.0 Oil = $77.02 RELX 1605.5 Rentokil Initial 322.0 Rio Tinto 4196.5 Rolls-Royce 824.6 Royal Mail 611.4 RSA 655.2 RBS 286.5 J Sainsbury 304.9 SSE 1401.5 Severn Trent 2020.0 Serco 99.4 Sports Direct 413.0 Shell 2693.0 Sky 1350.5 Smith & Nephew 1308.0 Smiths WH 2000.0 Stagecoach 150.4 Standard Chartered 764.6 Standard Life Aberdeen..367.5 TalkTalk 133.3 Taylor Wimpey 192.7 +22.0 +1.9 +69.5 -5.4 +7.6 +19.8 +10.4 +5.4 -2.5 +9.0 +0.5 +4.1 -29.0 -3.5 +9.0 +14.0 -2.6 +15.4 -1.7 +0.7 -1.2 The new owner of engineering giant GKN yesterday suffered a shareholder revolt over fatcat pay.
Nearly a quarter of investors voted against plans to hand business turnaround firm Melrose’s four top bosses at least £42million each.
Christopher Miller, David Roper, Simon Peckham and Geoffrey Martin are quids in under a long-term reward scheme.
And they could net £285m from overhauling GKN, the car and plane parts firm Melrose recently bought after an £8billion takeover battle. Tesco Thomas Cook Unilever United Utilities Vodafone Reach PLC 244.2 133.9 4140.0 781.2 210.1 86.9 +2.4 +0.9 +46.5 +6.2 +1.4 +1.9