Public floods to Lloyds float site
JOE and Joan Public will be keeping their beady eyes on Lloyds Banking Group’s thirdquarter trading statement next Wednesday.
The High Street bank’s performance will come under closer scrutiny following the Government’s recent decision to sell about £2bn of shares at a 5pc discount to the market price.
The proposed terms, and news that any investor who holds them for 12 months will be given a bonus share for every ten they hold, has prompted a massive response from the public. Around 250,000 had registered an interest in the sale on the Government’s website, while investment giant Hargreaves Lansdown reported more than 120,000 had signed up with the company for the sale.
Indeed, five times as many investors have registered for shares compared with the controversial Royal Mail float two years ago.
The Government’s remaining stake in Lloyds now stands at just below 11pc, down from 43pc, after it received a £20.5bn bailout in 2008. So far the sale of the stake has raised £15.5bn for the taxpayer.
A hefty 141m-plus shares in Lloyds were traded yesterday and the close was 0.11p dearer at 75.58p after Ian Gordon, banking guru at Investec, advised clients to buy ahead of the figures. His target price is 86p.
Over the past five years Lloyds has racked up cumulative losses of £4.2bn. But Gordon thinks the third-quarter statement should offer tangible relief with the possibility of a ‘conduct-free’ quarter. He forecasts a ‘record’ underlying pre-tax profits of £2.3bn in the third quarter of 2015 and ‘below the line’ anticipates the cleanest quarter in recent memory.
Royal Bank of Scotland, which reports thirdquarter results on October 30, eased 0.3p to 323.2p, well below the 502p at which the Government breaks even on its stake. The Government holds around 73pc after selling down from 79pc in August in a sale to only hedge funds and institutions. The Footsie dipped 7.20 points to 6345.13 in thin trading. Down 80 points at the outset following a 6pc fall in IBM on a bigger-than-expected fall in quarterly revenues, Wall Street rallied into the close, ending just 11.63 points down at 17,218.91.
Traders in New York are expecting shares in Ferrari to burn rubber and get in the fast lane when dealings get under way today. Spun-off by owner Fiat Chrysler Automobiles, the shares were ten times oversubscribed at a top of the range $52.
Fashion retailer Next strutted its stuff at 7840p, up 170p. Buyers loaded up with stock ahead of third-quarter results on October 28.
A Credit Suisse downgrade to under perform from neutral dragged drugs giant AstraZeneca 132p lower to 4024.5p. The broker cited worries over pricing, believing Astra struggles across the board with a portfolio in transition, high generic erosion and exposure to low pricing power in a number of key categories.
Copper miner Vedanta Resources was sold down to 497.5 before closing 43p off at 499p. The company strongly denied that chief executive Tom Albanese is about to leave the company and added Cynthia Carroll, who joined in September, will advise the chairman’s office on matters of strategic importance.
AVEVA put on 74p to 2082p in response to a Berenberg recommendation and target price of 2450p. The broker is confident that the group’s acquisition of selected Schneider Electric industrial software assets will succeed and the enlarged group will strengthen its key markets.
Cinema chain Cineworld featured a gain of 14.5p to 590.5p as investors banked on attendances soaring ahead of Christmas. Spectre, the latest James Bond extravaganza, is premiered next Monday, while Star Wars: The Force Awakens will be released on December 17.
Shares in identity intelligence specialist GBG Group advanced 7.75p to 250p after forecasting a 39pc rise to £32.3m in revenues for the year to end-September. It expects to show adjusted operating profits of £4.5m, up from £3.7m.
Further persistent demand in a market short of stock lifted Totally to 48p before a close of 44p, up a penny. Word is an earnings enhancing deal in the health coaching services area of its business could be just around the corner. The company provides one-to-one coaching from a nurse which helps a patient self manage their condition.
Teathers Financial, which recently launched a crowd funding app that enables qualified investors to take part in placings and IPOs in AIM companies at the same price and same terms as institutions, firmed 0.12p to 4.12p. It follows the launch of its first IPO through the app which gives private investors the chance to invest in David Lenigas’s new venture, Leni Gas Cuba Ltd.
Rurelec, which is focused on the Latin American electricity generation market, blew a big fuse and plummeted 0.48p or 42pc to 0.65p after major 53.99pc shareholder Sterling Trust went into administration.