Thomas Cook is unlikely bright spot on bleak day
On a day when stock markets were grim there was one unlikely bright spot – Thomas Cook.
Shares in the tour operator soared 35pc, or 3.19p, to 12.3p, after Turkish travel entrepreneur neset Kockar increased his shareholding in the business to 8pc.
The stock has more than doubled in value after the revelation of his stake building last week.
At one point analysts at leading American investment bank Citi declared the shares worthless, with the company drowning under £1.25bn of debt and in need of an immediate recapitalisation.
Since then, the firm has been promised a kiss-of-life funding of £750m from Chinese firm Fosun.
While it’s uncertain just what Kockar plans next – he is chairman of holiday giant Anex Tourism – the future looks a lot brighter for long-suffering holders of Thomas Cook stock.
The FTSE 100 lost 2.5pc, or 183.21 points, to 7223.85, piling on the agony after a 177-point drop on Friday. An escalation of the Sino-American trade war took on a new dimension when China threatened a currency war by allowing its currency to fall.
Among the blue-chip casualties were Ocado and Marks & Spencer – the pair couldn’t have picked a worse day to announce the completion of their partnership.
The deal gives M&S (off 5.2pc, or 10.35p, at 190.65p) half the online grocer’s UK delivery business for £750m.
Ocado (down 4.6pc, or 56p, at 1152.5p), meanwhile, said it had appointed M&S strategy director Melanie Smith as chief executive of the joint venture, called Ocado Retail. It seemed a rather odd time to upgrade British Airways owner International Airlines
Group with BA on the brink of industrial action.
But that’s just what the investment banking arm of HSBC did, raising IAG to a lukewarm ‘Hold’ from ‘Reduce’ while increasing its price target by 60p from 460p. But that didn’t stop the stock from falling with the wider market, down 0.8pc, or 3.7p, to 444.5p.
Two influential brokers believe shares in the London Stock
Exchange are up with events after hitting a fresh all-time closing high above 7000p a share late last week. In January the price was closer to 4000p.
Deutsche Bank and HSBC both have ‘Hold’ recommendations on LSE shares, valuing them at 6800p and 7000p respectively. The shares fell 3pc, or 208p, to 6606p. Topping the blue-chips was
Fresnillo, which bounced 4.8pc, or 29p, to 640p. The value of its reserves of silver is determined by the gold price, which has spiked against the backdrop of market uncertainty. Egypt-focused gold digger Centamin (up 3.1pc, or 4p, at 133.45p) also benefited from the shift into haven investments.
Among the small-caps, it was one step forward, two step back for Petro Matad after a Mongolian provincial government challenged its legal right to use the land at its Heron-1 prospect. The shares tanked 19pc, or 1.5p, to 6.4p.
Sticking with the natural resources sector, lower month-onmonth production in July sent the shares of Volga Gas 20.6pc, or 10p lower, to 38.5p.
Brexit appears to have claimed another victim in the form of RTC
Group, which was down 12.2pc, or 7p, to 50.5p. Things have been quiet for several months from the engineering and technical recruitment group but in its half-year results it revealed that its ATA subsidiary has encountered headwinds due to uncertainties over the UK’s future relationship with the European Union.