UK WINNERS & LOSERS SUMMARY: UK Banks Fall 5%-9% After Halting Returns

Wed, 01st Apr 2020 10:56

(Alliance News) - The following stocks are the leading risers and fallers within the main London indices on Wednesday.

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FTSE 100 - LOSERS

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Standard Chartered, down 7.1%, HSBC, down 8.9%, Lloyds Banking, down 5.5%, Royal Bank of Scotland, down 5.3%, Barclays, down 5.7%. Shares in banks were lower after the Prudential Regulatory Authority requested the suspension of shareholder returns. The PRA late on Tuesday said it "welcomed" the decision by large UK banks to suspend dividends and buybacks until the end of 2020 and also cancel any dividends for 2019 yet to be paid. This followed a request by the regulator for the banks to preserve cash amid the economic uncertainty posed by Covid-19. The PRA noted the banks are "strong" financially with the capacity to weather severe economic shock. "Already facing the prospects of lower margins, given the historically low interest rate environment, as well as the possibility of an increase in bad loans (impairment losses), banks will face general economic challenges in their quest to keep the wheels of the economy oiled," said Interactive Investor's Richard Hunter.

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Auto Trader, down 8.6% at 401.30 pence. The digital automotive marketplace said it will conduct a share placing to give its balance sheet a boost and added that its board members have decided to give up half their salaries as the car marketplace bids to save costs during the Covid-19 outbreak. Auto Trader will place up to 46.5 million shares through a bookbuild which kicks off on Wednesday. Auto Trader said the pricing will be determined by the company and Bank of America Corp, which is acting as the bookrunner. On its trading, the company said its results for the year ended March 31 will be "broadly in line with the market consensus", but it cannot provide guidance for financial 2021 due to uncertainty caused by the virus crisis. Based on the current share price, it will secure around GBP186.6 million through the placing.

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FTSE 250 - WINNERS

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Mitchells & Butlers, up 3.0%. HSBC raised the restaurant and pub operator to Buy from Hold. JD Wetherspoon was down 2.0% and Marston's down 0.6% despite both also being upgraded by HSBC.

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FTSE 250 - LOSERS

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Future, down 5.3%. The UK competition watchdog has opened a public consultation on the tie-up of the magazine publisher and TI Media before making its final decision. Future announced the GBP140 million purchase of fellow magazine publisher TI Media last October. The UK Competition & Markets Authority raised concerns in January, but last week the regulator said it would pass the acquisition if Future agreed to sell three competing titles. The CMA has until May 29 to make a final decision, though this could be extended to July 24.

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OTHER MAIN MARKET AND AIM - WINNERS

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Botswana Diamonds, up 32%. The diamond miner said it has been granted six new prospecting licences in Botswana. The three-year licences cover 4,319 square kilometres in the Central and Kgalagadi licences in the country, which Botswana Diamonds said are known as the Kalahari. Further, the company said the Botswana government has expended four existing licences covering 1,406 square metres for another two years, to the end of March 2022. "Airborne and ground magnetic surveys from previous work conducted by Sunland Mineral von these licences have revealed well-defined targets and subsequent soil sampling over the targets identified heavy concentrations of kimberlitic indicator minerals over these targets particularly Chrome Diopsides strongly suggesting an underlying kimberlite source," said Botswana Diamonds.

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OTHER MAIN MARKET AND AIM - LOSERS

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Central Asia Metals, down 17%. The miner decided against a final dividend on Wednesday as it looks to preserve cash as the Covid-19 crisis continues. CAML had declared a 6.5 pence per share dividend for the interim period. In 2018, the total payout was 14.5p. CAML's revenue in 2019 was 12% lower at USD171.7 million, with pretax profit slipping 6.7% to USD67.8 million. The company reported production from the Kounrad and Sasa mines, in Kazakhstan and North Macedonia respectively, in January. Copper production from Kounrad fell 2.0% in 2019 but beat guidance, while zinc production at Sasa rose 3.7% and lead fell 0.6%, both meeting guidance. "While we have a robust balance sheet and low-cost operations, the situation regarding Covid-19 and its potential impact on the global economy and our operations remains uncertain and is rapidly changing, so we believe that, currently, preserving cash is the most prudent approach," said CAML.

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By Arvind Bhunjun; arvindbhunjun@alliancenews.com