Hays and Keller

Thursday, October 11, 2018 - 10:16

“In the context of the sell-offs seen overnight in Asia and across the Atlantic the FTSE 100 made a relatively solid start, though it is still down more than 1% in early trading.

“Whether the US Federal Reserve is, as President Trump argues, ‘crazy’ to be lifting interest rates the prospect of further hikes certainly seems to be a catalyst for a lot of the market worry.

“The moves in US and Asian indices look alarming but the latest bout of market weakness is worth keeping in some perspective. In February the FTSE dived 3.4% at the open and a decade ago at the height of the crisis the index endured three 7%-plus falls in little more than a week.

“All eyes are likely to be on the US when trading begins this afternoon as investors look to judge if this is a ‘healthy correction’ or something more.

“A bear market is often defined as being a 20% fall over a two-month period. Using that yardstick, the FTSE is a long way short of that definition, down nearly 8% since August.”


“The market’s current state of mild panic may explain help explain the extremely negative reaction to an apparently solid quarterly performance from recruiter Hays.

“The focus appears to be on a slowing in net fee growth which was hit by the relative strength of sterling against the Aussie dollar and the euro as well as fall in the net cash position

“The pressure on the share price may also reflect the sensitivity of the recruitment sector to economic conditions.

“Recruiters like Hays tend to do well in strong economic conditions. Corporates feel more compelled to hire people and individuals feel confident enough to move jobs, seeking new opportunities.

“The reverse is also true. And while Hays says it is positive on the outlook it looks like nervous investors are not so convinced.”


“Today apparently is not a good day to attempt to bury bad news despite the market volatility.

“Groundworks engineering specialist Keller finds investors in unforgiving mood as it owns up to losses in its Asian business caused by deteriorating conditions, particularly in Malaysia.

“Keller is market leader in countries around the world in ground engineering, which involves providing technically advanced foundation solutions on construction and infrastructure projects.

“This is not the first time operations in Asia have tripped the company up, losses here were largely to blame for a major profit warning two years ago and there may now be questions over whether the company should continue to operate in these markets.”

These articles are for information purposes only and are not a personal recommendation or advice.

The daily market update is written by Russ Mould, AJ Bell’s Investment Director and his team. The article highlights the movement in the main index, winners and losers on the day and any macro-economic announcements.