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“After a decent showing last week, the FTSE 100 has continued to shine with a small advance on Monday to 7,370. Financial services, mining and pharma are among the stronger sectors on the UK stock market today,” says Russ Mould, Investment Director at AJ Bell.
CAPITA
“Shares in troubled outsourcing provider Capita have jumped upwards despite the business announcing a heavily-discounted fundraising and several parts of its full year results missing expectations.
“Key to the share price advance is investor relief that a £701m rights issue is fully underwritten, meaning various investment banks have guaranteed to take any of the new stock unwanted by shareholders, so there isn’t any doubt that it won’t raise all the desired money.
“The new cash should help remove financial pressures on the company’s balance sheet and allow management to focus on finding ways to revive Capita’s fortunes. However, the business will still be under pressure to show positive results fairly quickly if it is to keep investors on side.
“Its problems have been going on for several years and investors only have so much patience.”
ROTORK
“Engineer Rotork is on the way to recovering its reputation as a high-quality engineer after a period in which it was held back by the weak performance of its oil and gas related business.
“The company, which manufactures industrial flow control equipment, has recovered the premium equity rating it enjoyed before the oil price crash in 2014 with its shares hitting an all-time high as it posts a 10.2% increase in first quarter revenue.
“Higher demand from oil and gas producers helps underpin this rise as the firm also reveals order intake up 20.9%.”
CLARKSON
“The list of reasons behind a profit warning at shipping services business Clarkson is fairly extensive.
“It blames a challenging environment in shipping and offshore capital markets, lower freight rates within the tanker market and a fall in the dollar for the news that first half and full year profit will be materially below last year.
“However, although the global shipping market is not fully recovered from the damage wrought by the financial crisis a decade ago, the company’s own ClarkSea index of the industry implies a slightly more positive backdrop than its weak trading would suggest.
“Seaborne trade was up 3.9% in 2017 with ‘encouraging signs’ reported going forward.”
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