Share­hold­ers spooked by Aviva’s Sin­ga­pore U-turn

Scottish Daily Mail - - City & Finance - by Francesca Washtell

IN­SURER Aviva’s de­ci­sion not to sell its op­er­a­tions in Sin­ga­pore and China was met with scep­ti­cism from the City.

Aviva was the worst per­former on the Foot­sie af­ter it said in­vestors would benefit the most from keep­ing the Sin­ga­pore di­vi­sion and its joint ven­ture in China, where there are ‘high growth prospects’ and a huge mar­ket.

Me­dia re­ports sug­gested it would use an in­vestor day tomorrow to con­firm a sale of the Sin­ga­pore di­vi­sion, af­ter it kicked off a re­view of its Asian business ear­lier this year. It is still mulling whether to flog its units in Hong Kong, Viet­nam and In­done­sia.

An­a­lysts con­sider Aviva’s struc­ture to be clunky and in need of a shake-up – but the roll-back on Sin­ga­pore has raised fresh ques­tions over what new chief ex­ec­u­tive Mau­rice Tul­loch ac­tu­ally has planned for the group.

Its stock tum­bled 4.6pc, or 19.9p, to 414.5p last night. Bri­tain’s big­gest pawn­bro­ker,

H&T Group, shed around a quar­ter of its value in early trad­ing af­ter it re­vealed it is work­ing with City watch­dog the Fi­nan­cial Con­duct Au­thor­ity to re­view its high­cost, short-term credit business, which could re­sult in H&T pay­ing cus­tomers com­pen­sa­tion.

Boss John Ni­chols said the com­pany is work­ing with reg­u­la­tors but that its cash-strapped cus­tomers could be forced to turn to loan sharks in the run-up to Christ­mas. Shares closed down 16.7pc, or 62p, at 310p.

Tech firm IQE also had a dour start to the week. Its shares plunged 23pc, or 15.2p, to 50.65p, af­ter it cut its rev­enue fore­cast for the sec­ond time in five months and warned this would trig­ger an an­nual loss com­pared with a profit of £16m last year. IQE makes parts for chips that are used in Ap­ple prod­ucts and those of other Asian man­u­fac­tur­ers, but said it had been hit hard by the rag­ing USChina trade war and had ‘ex­pe­ri­enced very chal­leng­ing mar­ket con­di­tions in 2019’.

Hedge funds will be sit­ting pretty af­ter yes­ter­day’s share price drop – al­most 9pc of its stock was out on loan to short-sell­ers by the end of last week.

The FTSE 100 spent an­other day tread­ing wa­ter, clos­ing down 0.1pc, or 4.76 points, at 7307.7.

It was partly held back by a fall in Burberry shares (down 3.2pc, or 69p, to 2083p), which has been bat­tling with sink­ing sales in Hong Kong amid po­lit­i­cal un­rest, af­ter UBS an­a­lysts cut their target price on the lux­ury group’s stock from 2220p to 2175p.

JP Mor­gan bro­kers upped their target price on Euro­pean as­set man­ager M&G’s stock from 271p to 278p. This sent shares in M&G, which re­cently sep­a­rated from Pru­den­tial, 3.3pc higher, up 7.4p, to 233.4p, and lifted stocks across the sec­tor. Le­gal & Gen­eral rose 1.5pc, or 4p, to 280.7p, St James’s

Place closed 0.6pc higher, up 6p, to 1068p, while Har­g­reaves

Lans­down lifted 2.1pc, or 37p, to 1776p. It came as it was re­vealed hedge funds have tar­geted St James’s Place and Har­g­reaves, with 7.4pc and 6.2pc of their shares out on loan to short-sell­ers re­spec­tively over their close as­so­ci­a­tion with dis­graced fund man­ager Neil Wood­ford.

Im­pe­rial Brands was on the up (shares rose 1.2pc, or 20.2p, to 1752.6p) af­ter its group in­no­va­tion di­rec­tor, David Newns, spent £1.4m buy­ing al­most 80,000 shares in the to­bacco and eci­garette maker.

The FTSE 250 rose just 0.2pc, or 36.1 points, to close at 20440.5.

Con­sort Med­i­cal, which makes asthma pumps and self-in­jec­tion de­vices, soared 43.3pc, or 314p, to 1040p, af­ter it agreed to a £505m takeover by Swedish man­u­fac­turer Re­ci­pharm AB.

The board has rec­om­mended share­hold­ers ac­cept the 1010p per share cash of­fer, which they will vote on at a later date.

Newspapers in English

Newspapers from UK

© PressReader. All rights reserved.