ROYAL MAIL fell below its IPO price for the first time after City scribblers turned up the heat on the parcel deliverer with another slew of downgrades.
City analysts put the boot in after the share price plunged by 29pc in the wake of last week’s profit warning, dragging Royal Mail shares below 330p for the first time.
The Government was lambasted in 2014 for selling Royal Mail on the cheap at that price as its shares surged after the IPO valued the company at £3.3bn. But since May’s record high its share price has plummeted 45pc.
HSBC analyst Edward Stanford described the company’s stagnant productivity as “disturbing” and said a root cause of the missed cost savings target “appears to be poor staff morale in the wake of a bruising period for industrial relations”.
RBC’s Damian Brewer warned clients in a downgrade to “underperform” that its weakened share price still did not reflect the “amplified profit risks”.
After sinking as much as 16.6p to 321.8p, Royal Mail shares rallied strongly to close up 14.6p at 353p. Elsewhere, software giant Sage tumbled to a three-year low after Barclays warned that it had been left leaderless at a “crucial stage” in its turnaround.
Stephen Kelly departed as boss from Britain’s biggest listed tech firm in August after his overhaul faltered. Barclays said the new chief executive is “very likely” to ramp up investment and could also make “expensive” deals to kick-start the recovery. The downgrade to “underweight” sent Sage sliding 8.2p to 546.6p.
Asos slumped 256p to £51.48 after industry data showed online non-food sales growth stuttering to its lowest level since January. Growth pulled back to 5.4pc last month compared to 10.7pc in September 2017, the British Retail Consortium’s figures indicated. Following German rival Zalando’s recent profit warning, more signs of slowing online sales dragged Asos to a 20-month low ahead of its full-year results next week.
Hargreaves Services, a support services company, fell 3p to £20.42 after admitting that it could be impacted by UK-based miner Wolf Minerals’ financial woes. Wolf, which slumped a further 0.4p to 1.4p, admitted yesterday that it has just two days of last-gasp talks to secure funding from stakeholders.
Schroders rallied 66p to £30.43 after Berenberg labelled the City fund giant “uncharacteristically exciting” amid talks with Lloyds over a wealth-management tie-up. Finally, a three-day global rout in stocks ended after the pressure on markets was alleviated by US 10-year Treasury yields being pulled off a seven-year high. The FTSE 100 reversed a 0.7pc loss to nudge away from a six-month low, gaining 4.26 points at 7,237.59.