Oh dear. It’s all gone a touch pear-shaped at Bradford & Bingley. Last night private equity outfit Texas Pacific Group walked away from the bank’s reshuffled rights issue after credit rating agency Moody’s revealed it was about to downgrade B&B’s rating, taking its £179m funding injection with it. Fortunately Bradford’s biggest shareholders, including M&G, Legal & General and Standard Life, have come to the bank’s aid and it will continue to raise £400m at 55p in a rights issue underwritten by UBS and Citigroup. But the rescue package didn’t stop Bradford’s shares from plunging 15 per cent at one point this morning to below the rights issue price. They have since stabilised to 55.75p but are still down 9 per cent. Mike Trippitt, analyst at Oriel Securities, downgraded his recommendation on the shares to reduce and believes there is further downside risk for the shares, despite the recent poor performance. However, some City pundits argue that the new ...
Corporate life hangs in the balance for Taylor Wimpey which sacked its finance director today after it failed to secure rescue funding. The ailing house builder, which doesn’t expect tough trading conditions to improve any time soon, runs the risk of breaching banking covenants if the housing market gets any worse. Shares in the company halved this morning, hitting 30p. In total they have lost 91 per cent of their value over the past 12 months. And to add insult to injury, other weak performing house builders’ shares felt the collateral damage, with Barratt and Persimmon also down 23 per cent and 17 per cent respectively. Chris Millington, analyst at Numis, cut his target price on Taylor Wimpey’s shares to a mere 60p from 248p, but even that seems a tad optimistic now in light of this morning’s slide. Mr Millington reckons that despite the dire performance of house building shares this year and the grim outlook, value is out there but is better pursued through Berkeley and ...
The sun may be shining – as he writes Cityblogger is busy smearing himself with cut price BOG-OFF sunscreen in a nod to the credit crunch - but the lacklustre markets continue to cast a shadow over our summer. After a reasonable day yesterday, following Friday’s sea of red, the FTSE100 is down more than 2 per cent this morning and currently stands at 5,496. More gloom on the housing market front is largely to blame. The latest report out today from building society Nationwide says that house prices declined for the eight consecutive month in June, falling 0.9 per cent and standing at more than 7 per cent lower than the house price peak in 2007. True, this price decline compares favourable with the sharp 2.5 per cent fall in May. But with the lowest number of new home loan approvals recorded by the Bank of England in May, economists foresee more doom and gloom on the horizon, such as a likely fall in consumer spending which could hit other sectors of the economy besides ...
It's a veritable blood bath out there today in the markets. If yesterday wasn't a bad enough day on the FTSE100, the index slipped below the 5,500 mark this morning, hitting the miserable depths of 5,483, although it has since clawed back some ground to reach 5,533. But 5,483 marks a two year low for the index. Heavy selling on the US and Asian markets are to be to blame, as well as worries about consumer spending and the soaring price of crude oil, which touched $142 a barrel today. And frankly Cityblogger believes it's hard to see this volatility ceasing in the near term. There's simply no confidence or appetite for risk out there, and it's unlikely to change any time soon, until we have some really palpable positive economic news. Market misery aside, Cityblogger wishes you a relaxing and pleasant weekend. Technorati Tags: cityblogger,city blogger,ftse100,equities,oil price,bear market del.icio.us Tags: cityblogger,city ...
Retail sales figures released last week may have been surprisingly upbeat, so much so that the Bank of England’s Monetary Policy Committee members were left scratching their heads in bewilderment as to why consumers had shopped ‘til they dropped in May to produce the biggest monthly increase in retail sales since 1986. But Cityblogger notes that it’s a different story today. The FTSE100 is down more than 30 points, despite the US Federal Reserve leaving rates on hold yesterday evening at 2 per cent, and it’s all due to worries about retail and the continuing consumer slowdown. Investors are jittery after DSG unveiled a painful slump in profits this morning due to large impairment charges relating to a reshuffle of its Italian arm. The company behind electrical goods brands Currys, Dixons and PC World, revealed that underlying profits for the full year to 3 May 2008 fell a whopping 30 per cent to £205.3m (from £295.1m in 2007) this year. And these figures, while ...
