UK Stocks Tumble Again With AB Foods & Sports Direct Leading
Stocks in the UK were falling today, for a 2nd day of declines. Leaders of the decline were Associated British Foods and Sport Direct. In addition to the weakness of key companies, increasing tensions over Ukraine became prominent once again.
AB Foods was down 3.9 percent in early trading, mainly due to the report from Suedzucker AG (one of the largest producers of Sugar in Europe) that the companies annual operating profit could drop by up to a whopping 70 percent. This saw many investors head to the exit, and who could blame them?
On the other hand, Sports Direct owner Mike Ashley has been reported to have allocated up to £200 million worth of shares in the company up for sale. Goldman Sachs has announced it will place up to 24M shares up for sale with institutional investors. While this is a significant amount, Mr Ashley still holds a hefty stake in the company he founded.
Shares in Lloyds Bank were also down 4% in early PM trading, as the slide since the turn of March looks to gather pace. What was once deemed as the start of a recovery for banking shares is now looking grim, as banks start to suffer across the board. Although Numis are tending to have a contrarian view to the current market value. These are comments taken from their April 1st statement on Lloyds.
“We upgrade to buy’ (from ‘add’) and highlight Lloyds Banking Group in our UK monthly ‘top-picks’ published today,”
“We forecast equity cash-flow of 6.4p per share and a 2.0p dividend for 2014 (47% pay-out) increasing to 2.5p and 3.1p in 2015 and 2016.”
Tensions in Ukraine
Many eyes are still watching the situation closely in Ukraine. The USA has accused Russia of stirring up trouble in the capital, and the Whitehouse has stated there is evidence of Russian involvement. How this pans out is anyone’s guess, but uncertainty about economic sanctions by Europe is still a worry for the markets.
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