Currencies

China capital curbs reflect buyer’s remorse over market reforms

Last year the reformist head of China’s central bank convinced his Communist party bosses to give market forces a bigger say in setting the renminbi’s daily “reference rate” against the US dollar. In return, Zhou Xiaochuan assured his more conservative party colleagues that the redback would finally secure coveted recognition as an official reserve currency […]

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Banks

Carney: UK is ‘investment banker for Europe’

The governor of the Bank of England has repeated his calls for a “smooth and orderly” UK exit from the EU, saying that a transition out of the bloc will happen, it was just a case of “when and how”. Responding to the BoE’s latest bank stress tests, where lenders overall emerged with more resilient […]

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Currencies

China stock market unfazed by falling renminbi

China’s renminbi slump has companies and individuals alike scrambling to move capital overseas, but it has not damped the enthusiasm of China’s equity investors. The Shanghai Composite, which tracks stocks on the mainland’s biggest exchange, has been gradually rising since May. That is the opposite of what happened in August 2015 after China’s surprise renminbi […]

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Capital Markets

Mnuchin expected to be Trump’s Treasury secretary

Donald Trump has chosen Steven Mnuchin as his Treasury secretary, US media outlets reported on Tuesday, positioning the former Goldman Sachs banker to be the latest Wall Street veteran to receive a top administration post. Mr Mnuchin chairs both Dune Capital Management and Dune Entertainment Partners and has been a longtime business associate of Mr […]

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Banks

Financial system more vulnerable after Trump victory, says BoE

The US election outcome has “reinforced existing vulnerabilities” in the financial system, the Bank of England has warned, adding that the outlook for financial stability in the UK remains challenging. The BoE said on Wednesday that vulnerabilities that were already considered “elevated” have worsened since its last report on financial stability in July, in the […]

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Categorized | Equities

Thomas Cook hits travel stocks


Posted on November 26, 2014

Travel stocks missed out on a wider, miner-led rally in London on Wednesday after the sudden resignation of the chief executive of Thomas Cook unnerved the sector.

After Harriet Green, who drove the recovery of the tour operator from near-collapse, announced her immediate departure, shares in the company slumped 19 per cent to 111.6p and the bottom of the mid-cap FTSE 250.

    Thomas Cook also trimmed its guidance for the full year, saying it expected growth in the 12 months to September 2015 to come “at a more moderate pace”. It noted that geopolitical uncertainty was damping demand, with weakening consumer confidence in Europe also taking a toll.

    “Investor concern is that Ms Green has left too soon and that the company transformation may be at risk,” said Rebecca O’Keeffe, head of investment at Interactive Investor.

    “Comments that her ‘work was complete’ conflict with other statements in their results that there is still ‘more to do’.”

    Credit Suisse cut its rating on Thomas Cook’s stock from “outperform” to “neutral”, saying: “The outlook commentary is balanced but cautious as the company note it expects more measured [earnings] growth plus highlights winter trading and extra cost pressures . . . We lower our 2015 and 2016 earnings before interest and taxation forecasts by 10 per cent and 13 per cent [respectively]”.

    As traders read across from the news, Tui Travel was among the biggest fallers on the FTSE 100, down 0.8 per cent at 443p. EasyJet was caught in the downdraft, turning around from its recent gains which related to lower crude prices. The stock drifted 0.5 per cent to £15.52.

    Overall, the main London index rose 0.3 per cent to 6,749.06, a rise of 18 points, with the rally underpinned by resurgent base metal stocks as risk appetite continued to improve on global markets.

    London’s best single gainer was Antofagasta, up 4.2 per cent at 764p. Anglo American gained 0.7 per cent to £13.39.

    Defensive stocks were lower in line with the more confident mood. Admiral Group, the car insurer, fell 0.7 per cent to £12.14 while United Utilities slid 0.8 per cent to 907½p.