U.K. Stocks Fall, Led by HBOS, EasyJet, Mitchells %26amp; Butlers
By Adam Haigh
March 19 (Bloomberg) — U.K. stocks dropped, led by HBOS
Plc on speculation the U.K.s biggest mortgage lender may have
funding problems. Royal Bank of Scotland Group Plc and HSBC
Holdings Plc also fell.
EasyJet Plc slumped after it said full-year earnings may
fall short of company forecasts as it struggles to pass
increased fuel costs on to passengers. Mitchells %26amp; Butlers Plc
tumbled after Lehman Brothers Holdings Inc. said the owner of
the All Bar One pub chain may be short of cash.
The benchmark FTSE 100 Index lost 78.7, or 1.4 percent, to
5,527.1 at 11:07 a.m. in London. The FTSE All-Share Index
dropped 1.4 percent and Irelands ISEQ Index declined 1.8
percent.
HBOS dropped 8.4 percent to 440 pence.
“The banks were volatile this morning with rumors that
HBOS was having funding issues and that it would turn to the
Bank of England, Jawaid Afsar, a trader at Securequity Ltd. in
Sheffield, England, said by e-mail today. “Clearly this
scaremongering is hurting the financials unnecessarily.
“There are no liquidity problems, HBOS spokesman Shane
ORiordain said in a telephone interview today. “We have ready
access to a deep pool of deposits. We can access the wholesale
markets whenever we feel appropriate to do so.
Royal Bank, Britains third-biggest bank, lost 5.6 percent
to 307.75 pence and HSBC, the U.K.s largest, declined 1.8
percent to 785.5 pence.
“Cash Injection
EasyJet, Europes second-biggest discount airline, slumped
16 percent to 313.5 pence after saying pretax profit through
Sept. 30 may be “below previous guidance as the fuel price
adds as much as 45 million pounds ($91 million) to second-half
expenses.
Mitchells %26amp; Butlers Plc tumbled 10 percent to 316.25 pence.
“The company could require a cash injection, Lehman
analyst Julian Easthope wrote in a note to clients. He almost
halved his share-price estimate to 235 pence from 450 pence, and
rates Mitchells “underweight.
ICAP Plc, the worlds largest broker of transactions
between banks, rose 1 percent to 557 pence. The company said it
expects the credit crisis will boost trading of bonds,
currencies and commodities.
This statement “combined with their investor day
presentation, paints a positive picture of a company enjoying
both favorable market conditions and a renaissance of growth,
Merrill Lynch %26amp; Co. analyst Philip Middleton wrote in a note to
clients today.
Aegis Group Plc, the worlds largest independent buyer of
advertising space, added 3 percent to 113.25 pence after
reporting 2007 earnings that beat analysts estimates as it won
more Internet orders. Panmure Gordon %26amp; Co. upgraded the stock to
“buy from “hold after saying these results were “well
ahead of expectations.
The following stocks also rose or fell in the U.K. and
Irish markets. Stock symbols are in parentheses.
U.K. Companies:
Catlin Group Ltd. (CGL LN) lost 6.5 pence, or 1.6 percent,
to 398.5, after shares of the largest insurer in the Lloyds
insurance market were cut to “neutral from “buy at
Goldman, Sachs %26amp; Co.
Evolution Group Plc (EVG LN) dropped 3 pence, or 2.8
percent, to 106. The U.K. stockbroker and investment bank that
bought private bank Williams de Broe Ltd. said full-year profit
fell 9.5 percent.
HR Owen Plc (HRO LN) climbed 1.5 pence, or 1.1 percent, to
139. The owner of the largest Bentley car dealership in the
world said Bentley Motors Ltd. acquired a 28 percent stake and
added that the closely held carmaker currently has no plans to
increase its holding.
Misys Plc (MSY LN) slumped 10 pence, or 6.2 percent, to
151.25 after the U.K.s third-biggest software maker was
downgraded to “neutral from “buy at UBS AG which also gave
the shares a “short-term sell rating.
Next Plc (NXT LN) dropped 61 pence, or 5.2 percent, to
1,118. The U.K.s third-largest clothing retailer said first-
half sales may be unchanged at its catalog unit and will drop
further in its stores as higher living costs erode incomes.
Irish Companies:
Aer Lingus Group Plc (AERL ID) declined 3 cents, or 1.5
percent, to 2.04 euros after Irelands second-largest airline
lost a European court bid to freeze larger competitor and
shareholder Ryanair Holdings Plcs voting rights for as long as
two years.
To contact the reporters on this story:
Kari Lundgren in London at
klundgren2@bloomberg.netAdam Haigh in London at
ahaigh1@bloomberg.net
