Wealth Manager - the site for professional investment managers

Register to get unlimited access to Citywire’s fund manager database. Registration is free and only takes a minute.

UK retailers come out fighting, but Rio weighs on FTSE

UK retailers come out fighting, but Rio weighs on FTSE

FTSE 100-listed retailers came out fighting today, with results from Primark-owner Associated British Foods and Home Retail Group, which owns Argos, winning over investors.

Overall, though, shares in London were mixed, with the FTSE 100 stalling at the 6,100 mark, as mining companies exerted a drag. US markets trended down overnight as a report from the World Bank, warning that a slow economic recovery in developed nations is holding back the global economy, offset upbeat earnings reports from Goldman Sachs and JP Morgan.

In London this morning, Rio Tinto (RIO.L) shares, down 3% to 3,354p, led the fallers after the miner revealed that chief executive Tom Albanese would step down after a £14 billion write-down, to be replaced by insider Sam Walsh. ‘It seems the management change was effectively forced,’ commented Nomura analyst Matthew Kates, though he added that a change in strategy was unlikely under Walsh ‘who is seen as a pretty straight shooter’.

Folllowing Rio lower, Anglo American (AAL.L) shares dropped by 1.1% to 1,880p, while Xstrata (XTA.L) was trading down 0.9% to 1,131p.

Results from retailers, though, prompted analysts to re-think their prognoses of the death of the British high street.

ABF (ABF.L) leapt by 4.3% to 1,623p after reporting a 10% rise in group revenue in the 16 weeks to 5 January, driven by strong sales at clothing retailer Primark. Jefferies analysts said the numbers had given ABF ‘the best possible start to the year’, maintaining their ‘hold’ rating on the shares. Panmure Gordon raised their price target to 1,670p.

Home Retail (HOME.L) shares shot up 10% to 134p after the Argos and Homebase owner raised its full year profit expectations. Analysts at Seymour Pierce raised their rating on the shares from ‘sell’ to ‘hold’, suggesting that when the wider economy improves a private equity firm may be tempted to make a bid for the company.

Online fashion retailer Asos (ASOS.L) reported a 41% increase in retail sales in December. Shares rose 1.7% to 2,700p.

Dixons Retail (DXNS.L), owner of PC World and Currys, reported strong festive trading. But shares dropped 1.1% to just below 27p.

Mothercare (MTC.L) on the other hand reported a 7.4% fall in third quarter group sales. Shares dropped 4.1% to 291p.

Leave a comment!

Please sign in or register to comment. It is free to register and only takes a minute or two.
Citywire TV
Play Wealth Manager Retreat 2017: size isn't everything

Wealth Manager Retreat 2017: size isn't everything

We asked our delegates at the Wealth Manager Retreat what they think about the recent wave of consolidation in the industry.

1 Comment Play CIO Tapes - part 3: 'passive funds are anti-capitalist'

CIO Tapes - part 3: 'passive funds are anti-capitalist'

Citywire recently gathered three of the UK's leading fund investment heads to discuss their hopes, fears and the issues that their jobs throw at them daily.

Play CIO Tapes: do investors have it as good as it gets?

CIO Tapes: do investors have it as good as it gets?

Citywire gathered three of the UK's leading fund investment heads to discuss what they fear and what makes them cheer about the year ahead

Read More
Your Business: Cover Star Club

Profile: from managing Brunei’s billions to Dorking’s pension pots

Profile: from managing Brunei’s billions to Dorking’s pension pots

Mole Valley Asset Management's boss on why he chucked in multi-billion mandates for Surrey wealth management

Wealth Manager on Twitter