Falls for Johnson Matthey as rivals charge ahead in electric car race
CHEMICALS specialist
Johnson Matthey slipped into reverse gear on a tumultuous market yesterday amid fears that it’s being left in the dust by rivals in its plan to tap into the electric vehicle revolution.
Belgian peer Umicore reported record results and sold 10pc of its shares to create a near £800m war chest to fund its expansion in the electric battery market, leaving late entrant Johnson Matthey struggling to keep pace.
Investors piled into Johnson Matthey in September when it unveiled a spending spree designed to “future proof ” the company amid fears that the bottom is falling out of the demonised diesel car market.
The FTSE 100 firm revealed plans to pump investment into cathode materials for electric car batteries, with the goal of taking a large slice of a market potentially worth up to $22bn a year when 10pc of cars on the road are electric.
But City analysts believe that Johnson Matthey’s pledge to invest £200m by 2021 is dwarfed by rival Umicore’s €2bn (£1.77bn) spending plan.
Broker Liberum also noted that Johnson Matthey will be left out in the cold in talks in Brussels scheduled this autumn with car giants Volkswagen and Mercedesbenz-maker Daimler.
Concerns that Johnson Matthey is losing the race in the electric car battery market made it the biggest FTSE 100 loser.
It shed 141p, or 4.3pc, to £31.10 in its worst day of trading in over 19 months.
Elsewhere, travel company Hogg Robinson skyrocketed 38p to 116p after agreeing to a takeover by American Express. The Amex offer of up to 120p per share, or around £400m, is subject to Hogg Robinson selling its pay management subsidiary Fraedom to its largest client Visa for £141m. Amex’s bid will reduce to 110p per share if the deal falters.
Oil prices tumbled to their lowest level in 2018 with WTI crude – the US benchmark – sinking back below $60 per barrel.
Fears that high prices have opened the door to US shale drillers and will cause a surge in supply extended oil’s losing streak to a sixth day. Brent crude plunged 2.8pc to below $63 per barrel, bringing its weekly fall to 8.1pc.
The worst weekly fall in prices in two years dragged down London’s mid-cap oil producers reliant on high prices to bump up their revenue.
Premier Oil’s 5.3p tumble to 72.7p and Enquest’s 2p drop to 30.4p outpaced the wider market while oil major BP dropped 11.1p to 470.1p to its lowest level since September.
Roadside rescuer the AA and emerging markets asset manager Ashmore suffered in the aftermath of their updates to the market this week, diving a further 5.8p to 119.3p and 36.2p to 386.6p, respectively.
Confidence on stock markets continued to sink after another late sentiment-denting dip in New York the night before.
European markets deteriorated in the final few hours of trading with the
FTSE 100 dropping 78.26 points to 7,092.43 despite the pound’s woes on currency markets.
The sell-off continued into American trading with the fresh bout of jitters pinned on stronger Chinese trade data, the Bank of England hinting at an imminent rate hike and the prospect of higher government spending in the United States after a stopgap funding deal was finally reached.