UK share prices watch: HL stays in the doldrums
Blue-chip asset manager Hargreaves Lansdown (LON:HL) has remained among this week’s UK share prices to watch, staying in the doldrums in the wake of the suspension of Neil Woodford’s top fund. FTSE 100 insurer Aviva (LON:AV) is also underperforming the market after announcing that it was parting ways with its finance chief.
HL and Aviva drop on Wednesday
Hargreaves Lansdown has remained deep in the red after one of the UK’s most known fund managers Neil Woodford suspended trading in his largest fund, the Woodford Equity Income Fund. The Financial Times reports that Hargreaves Lansdown has been one of the most prominent backers of the investor, showcasing his fund to its more than 1.1 million customers and investing £600 million of client money via its own-brand funds. The FTSE 100 group’s customers owned around £2 billion of Woodford’s £10.1 billion in assets at the end of March.
“To own such a size of Mr Woodford’s fund is quite scary,” said Charles Younes, an analyst at Trustnet, commented, as quoted by the FT. Hargreaves Lansdown’s share price has given up just under six percent in early afternoon trade, underperforming the broader London market, with the benchmark FTSE 100 index standing about 0.4 percent higher.
Aviva is also firmly in negative territory this Wednesday with investors digesting news that the company’s finance chief is stepping down at the end of the month. The development comes amid expectations that the blue-chip insurer would announce a major shake-up under its new chief executive Maurice Tulloch.
“After the departure of the UK CEO Andy Briggs, this is another high-profile exit from the management team at Aviva. New CEO Maurice Tulloch is clearly keen to put in place his own team to deliver the increased pace of change that he has promised,” Shore Capital commented in a note to clients, as quoted by Proactive Investors, adding that its “fair value, based on profit attributable to shareholders, of 430p indicates little upside at this point”. Shares in Aviva are down by about 1.5 percent.
Elsewhere on the FTSE 100, shares in British Airways and Iberia parent International Consolidated Airlines Group (LON:IAG) have been in demand as analysts at JP Morgan initiated coverage of the company with an ‘overweight’ rating.
“IAG’s earnings before interest and tax (EBIT) margin and return on capital employed are now as good as Ryanair and much better than those of easyJet,” the broker pointed out, as quoted by Proactive Investors. “We cannot rule out near-term downside, mainly due to Brexit uncertainty, but we believe IAG has robust long-term prospects and is significantly undervalued.” IAG’s shares have gained a little over two percent so far today.
Outside the blue-chip index, one of today’s most notable UK share prices to watch has been subprime lender Provident Financial (LON:PFG), whose stock has spiked this Wednesday as the company fended off a hostile takeover bid from smaller rival Non-Standard Finance (LON:SNF).
“The Provident Board believes this outcome to be in the best interests of Provident Shareholders and greatly regrets the unnecessary distraction, cost and impact of the uncertainty on Provident’s customers and staff caused by NSF pursuing its extended hostile Offer,” the subprime lender commented in the statement. Provident Financial’s shares are rallying by more than 14 percent, while Non-Standard Finance’s stock has given up more than six percent in early afternoon trade.
Broader market sentiment meanwhile has improved, as Federal Reserve Chair Gerome Powell said yesterday that the US central bank would act ‘as appropriate’ to the fallout from Washington’s trade war with Beijing.
“Not an explicit reference to a cut but enough for this market to latch on to,” Markets.com analyst Neil Wilson commented, as quoted by Reuters. “Those betting the farm on the Fed cutting rates this year may be left with a small harvest.”
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Thursday’s UK share prices to watch
London-listed companies reporting tomorrow include Auto Trader (LON:AUTO) and CMC Markets (LON:CMCX) which are both set to update the market on their full-year performance.
UK share prices set to come under pressure tomorrow include Associate British Foods (LON:ABF), Johnson Matthey (LON:JMAT), Kingfisher (LON:KGF), Sainsburys (LON:SBRY), Scottish Mortgage Investment Trust (LON:SMT), Taylor Wimpey (LON:TW) and Vodafone (LON:VOD), with the companies going ex-dividend.
While little is scheduled on the corporate front, investors will await the European Central Bank’s monetary policy decision. IG reports that rates are expected to remain steady at 0%.
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