Insurer Aviva’s decision not to sell its operations in Singapore and China was met with scepticism from the City.
Aviva was the worst performer on the Footsie after it said investors would benefit the most from keeping the Singapore division and its joint venture in China, where there are ‘high growth prospects’ and a huge market.
Media reports suggested it would use an investor day tomorrow to confirm a sale of the Singapore division, after it kicked off a review of its Asian business earlier this year. It is still mulling whether to flog its units in Hong Kong, Vietnam and Indonesia.
Analysts consider Aviva’s structure to be clunky and in need of a shake-up – but the roll-back on Singapore has raised fresh questions over what new chief executive Maurice Tulloch actually has planned for the group.
Its stock tumbled 4.6 per cent, or 19.9p, to 414.5p last night.
Britain’s biggest pawnbroker, H&T Group, shed around a quarter of its value in early trading after it revealed it is working with City watchdog the Financial Conduct Authority to review its high-cost, short-term credit business, which could result in H&T paying customers compensation.
Boss John Nichols said the company is working with regulators but that its cash-strapped customers could be forced to turn to loan sharks in the run-up to Christmas. Shares closed down 16.7 per cent, or 62p, at 310p.
Tech firm IQE also had a dour start to the week. Its shares plunged 23 per cent, or 15.2p, to 50.65p, after it cut its revenue forecast for the second time in five months and warned this would trigger an annual loss compared with a profit of £16m last year. IQE makes parts for chips that are used in Apple products and those of other Asian manufacturers, but said it had been hit hard by the raging US-China trade war and had ‘experienced very challenging market conditions in 2019’.
Hedge funds will be sitting pretty after yesterday’s share price drop – almost 9 per cent of its stock was out on loan to short-sellers by the end of last week.
The FTSE 100 spent another day treading water, closing down 0.1 per cent, or 4.76 points, at 7307.7.
It was partly held back by a fall in Burberry shares (down 3.2 per cent, or 69p, to 2083p), which has been battling with sinking sales in Hong Kong amid political unrest, after UBS analysts cut their target price on the luxury group’s stock from 2220p to 2175p.
JP Morgan brokers upped their target price on European asset manager M&G’s stock from 271p to 278p. This sent shares in M&G, which recently separated from Prudential, 3.3 per cent higher, up 7.4p, to 233.4p, and lifted stocks across the sector. Legal & General rose 1.5 per cent, or 4p, to 280.7p, St James’s Place closed 0.6 per cent higher, up 6p, to 1068p, while Hargreaves Lansdown lifted 2.1 per cent, or 37p, to 1776p. It came as it was revealed hedge funds have targeted St James’s Place and Hargreaves, with 7.4 per cent and 6.2 per cent of their shares out on loan to short-sellers respectively over their close association with disgraced fund manager Neil Woodford.
Imperial Brands was on the up (shares rose 1.2 per cent, or 20.2p, to 1752.6p) after its group innovation director, David Newns, spent £1.4m buying almost 80,000 shares in the tobacco and ecigarette maker.
The FTSE 250 rose just 0.2 per cent, or 36.1 points, to close at 20440.5.
Consort Medical, which makes asthma pumps and self-injection devices, soared 43.3 per cent, or 314p, to 1040p, after it agreed to a £505m takeover by Swedish manufacturer Recipharm AB.
The board has recommended shareholders accept the 1010p per share cash offer, which they will vote on at a later date.
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