View the article online at http://citywire.co.uk/money/article/a668955
Jittery investors snap up Aberdeen, Schroders
FTSE little moved as investors continue to fret over the fall-out from yesterday's deal for Cyprus, but investors snap up asset managers.
Investors made tentative moves back into shares after yesterday’s sharp-sell off, as fears over the fall-out from Cyprus’s last-minute rescue package gave way to limited bargain hunting.
Most European stock indices moved slightly higher in calmer trading, with the pan-continental Eurofirst 300 trading up 0.2% to 1,189. Britain’s FTSE 100 lagged, flip-flopping around the 6,380 mark, though asset managers were making gains. The euro rose 0.2% to $1.2874.
Gains were capped, though, as investors continued to fret over comments by Eurogroup chief and Dutch finance minister Jeroen Dijsselbloem that the Cypriot bailout framework was a ‘template’ for the eurozone. He did, however, later partially retract this sentiment-sapping comment, stating that Cyprus is a ‘specific case’.
The Cypriot government announced that banks will remain closed until Thursday, with temporary capital controls in place. The move comes after a deal was reached to secure a €10 billion bailout, in which Cyprus will restructure its banking sector and tap deposits of over €100,000 for contributions towards the bailout.
US markets followed Europe down, with banking shares suffering in line with their European counterparts. Major Asian indices were generally lower as a report that China was increasing its property market controls added to uncertainty.
In Japan the focus was on new central bank chief Haruhiko Kuroda, who reiterated that the Bank of Japan must do whatever it takes to meet its new 2% inflation target. This may include purchasing longer-dated bonds.
In London though, the focus was on corporate results and analyst rating changes. Kazakhmys (KAZ.L), the copper miner, was the biggest faller on the FTSE 100, down 9.2% to 403p after announcing a $2.2 billion hit on the value of its stake in ENRC (ENRC.L).
Analysts at Nomura however noted that the write-off had already been flagged. ‘This morning’s release is mostly uneventful and includes a number of impairment charges/one-offs,’ they said.
ENRC followed Kazakhmys lower, down 5.2% to 253p.
Wolseley (WOS.L), the plumbing supplier, was also among the losers, dropping 2.9% to 3,121p after announcing a 20% decline in interim pre-tax profits.
Boost for financials
Asset managers and insurance companies made gains, however, boosted by a variety of separate announcements that encouraged investors that the sector is in good health.
Resolution (RSL.L), the insurance consolidation company, rose by 2.2% to 274p after raising its dividend by 6.3% and reported a 28% rise in new business.
The Citywire guide to investment trusts
In association with Aberdeen Asset Management
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Look up the shares
- Schroders PLC (SDRt.L)
- Aberdeen Asset Management PLC (ADN.L)
- Kazakhmys PLC (KAZ.L)
- Eurasian Natural Resources Corporation PLC (ENRC.L)
- Wolseley PLC (WOS.L)
- Legal & General Group PLC (LGEN.L)
- WM Morrison Supermarkets P L C (MRW.L)
- Resolution Ltd (RSL.L)
- Kingfisher PLC (KGF.L)
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