Thomas Cook (LON:CPG) has been one of today’s notable UK share prices, slumping yet again as investors reacted to an update to the group’s refinancing plan. Tour operators are set to stay in focus this week, with FTSE 100 peer TUI Group (LON:TUI) set to post results tomorrow.
Thomas Cook shares in the doldrums
Thomas Cook has slumped this Monday as it announced an update to its refinancing plan, saying that it was in discussions with its biggest shareholder Fosun Tourism Group and its core lending banks for an additional £150-million cash injection. The tour operator’s plans, however, are set to result in a significant amount of debt converted into equity, meaning that existing shareholders are “expected to be significantly diluted as part of the recapitalisation”.
The company added that the shareholders “may be given the opportunity to participate in the recapitalisation on terms to be agreed between, among others, the company, Fosun, and the converting financial creditors”. The group’s shares have given up more than 17 percent in early afternoon trade, and are down by some 90 percent over the past year.
On the other hand of the spectrum, Tullow Oil (LON:TLW) is rallying after announcing a major oil discovery in the Orinduik block in Guyana.
“This substantial and high value oil discovery in Guyana is an outcome of the significant technical and commercial focus which has underpinned the reset of our exploration portfolio,” Tullow’s CEO Paul McCade commented in the statement. “It is an excellent start to our drilling campaign in the highly prolific Guyana oil province. We look forward to drilling both the Joe and Carapa prospects in our 2019 drilling campaign and the material follow-up exploration potential in both the Orinduik and Kanuku licences.” Shares in the London-listed oil group are up by more than 17 percent.
In blue-chip UK share prices to watch, Royal Bank of Scotland (LON:RBS) is down this Monday alongside shares in HSBC (LON:HSBA), Lloyds (LON:LLOY) and Barclays (LON:BARC), reacting negatively to tension in Hong Kong and US-China trade worries. In RBS-specific news, reports over the weekend suggested that the bailed-out lender is set to announce the appointment of Allison Rose to succeed outgoing chief executive Ross McEwan to the top job.
Joshua Mahoney, senior market analyst at IG, recently commented in a note that the wider trend for RBS’ shares “evident since the turn of 2018 has been a bearish one, with the trend of lower highs continuing after the respect of trendline resistance back in April”. RBS’ share price is about 1.8 percent worse off this Monday, as compared with about a 0.4-percent fall in the Footsie.
Rolls-Royce Holdings (LON:RR) is deep in the red on the back of news that parts from one of its Trent 1000 engines had dropped from a Norwegian Boeing 787 taking off in Rome. The Telegraph notes that according to local reports and images on social media, 25 cars and a dozen houses in the Rome suburb of Fiumicino were damaged by fragments from the aircraft.
“We are aware of the event and are working with our customer to provide support and technical assistance,” a spokesman for the British engine maker said, as quoted by Sharecast. “We are committed to working closely with the airline, aircraft manufacturer and the relevant authorities to support their investigation.” The news comes after last week, Rolls-Royce increased its Trent 1000 in-service costs by a total of about £100 million across the next three years. Shares in the company are down by about 3.9 percent.
If you are looking for information on more UK-related assets, take a look at this article on The Brexit Impact on the GBP. For information on stocks on the other side of the Atlantic, check out this guide covering Stocks Which Tend to Rally in August.
UK share prices to watch tomorrow
TUI is likely to be among tomorrow’s UK share prices to watch, with investors eyeing its third-quarter results, which will follow the group’s profit warnings this year. The blue-chip tour operator has been pressured by the grounding of the Boeing 737 Max aircraft.
“People will want to hear more detail from the company about what their current estimate is [for the 737 Max grounding] because the situation is shifting all the time,” Ian Forrest, an analyst at online stockbroker the Share Centre, commented, as quoted by the Guardian, adding that the FTSE 100 group’s “hotels and cruises should still be a positive, but things are changing so much that it’s hard to know what to expect”.
Later in the week, investors will see updates from car insurer Admiral (LON:ADM) and asset manager Prudential (LON:PRU) which is currently in the process of splitting itself up.
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