Mar­kets

The Daily Telegraph - Business - - Front Page - TOM REES

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.

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