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.
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 21, or 0.4 percent, to
5,584.8 at 12:58 p.m. in London. The FTSE All-Share Index
dropped 0.4 percent and Irelands ISEQ Index declined 1.4
percent.
HBOS dropped 8.8 percent to 438.25 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.
Banking analyst Alex Potter at Collins Stewart wrote in a
note today that he continues “to see stock-specific funding and
writedown risk in HBOS.
“Cash Injection
EasyJet, Europes second-biggest discount airline, slumped
12 percent to 328.5 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 lost 5 percent to 332.5 pence.
“The company could require a cash injection, London-
based 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.
Mitchells %26amp; Butlers denied its short of cash, saying the
report is “without any basis, according to a company
statement today.
The following stocks also rose or fell in the U.K. market.
Stock symbols are in parentheses.
Aegis Group Plc (AGS LN), the worlds largest independent
buyer of advertising space, added 2.75 pence, or 2.5 percent, to
112.75 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.
Catlin Group Ltd. (CGL LN) lost 5 pence, or 1.2 percent, to
400, 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 7 pence, or 6.4
percent, to 102. 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.
Kesa Electricals Plc (KESA LN), the owner of Darty
electronics stores in France and the U.K.s Comet chain, lost 4
pence, or 2 percent, to 193.5 after saying annual profit dropped
27 percent after a writedown related to the sale of its French
BUT furniture chain.
Misys Plc (MSY LN) slumped 11.75 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 69 pence, or 5.9 percent, to
1,110. 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.
To contact the reporter on this story:
Adam Haigh in London at
ahaigh1@bloomberg.net.
