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“Stock markets didn’t get the memo that we’re supposed to start the New Year with a positive attitude towards being fit and healthy. “A slowdown in China’s manufacturing sector hurt stocks in Asia and also added to investor concerns about a global economic slowdown in 2019, leading to weakness across European markets. “Weak oil prices were also to blame for stock market jitters, particularly in the UK where the resources-heavy FTSE 100 index sank 1.7% to 6,610. Miners and oil producers were among the big fallers, together with banks and insurers,” says Russ Mould, Investment Director at AJ Bell.
Debenhams
“Investors seem to have little faith that Debenhams had a good Christmas trading period given its share price is down 10% on the first stock market trading day of 2019.
“Pictures on social media of the retailer’s messy shelves and the usual widespread discounts on goods people don’t really want in the first place would suggest that Debenhams continues to be stuck in a rut.
“A trading update expected on 10 January should give the market some answers although expectations remain low for the business to deliver good news.
“Debenhams hasn’t updated on trading since 25 October and we know from many of its competitors that November was a terrible month for retailers and December is also likely to have been a struggle.
“Debenhams is now worth a mere £57m which is astonishing for a business that generated more than £2 billion of sales in its past financial year.
“The UK winner of the £115 million EuroMillions jackpot on New Year’s Day could buy Debenhams and still have half their money left over. However, it seems fair to suggest that wouldn’t be the best way to spend their winnings given the company is drowning in debt and has a business model which is increasingly irrelevant in the modern world of retailing.”
Ophir Energy
“Oil exploration can be an unforgiving activity and with Ophir Energy trading at just a fraction of the market value it enjoyed in the early 2010s it is perhaps unsurprising a potential cash bid has emerged for the company.
“How generous its Indonesian suitor Medco is prepared to be is open to question. With oil prices still volatile, any deal could flounder over a lack of agreement on what represents a fair value for the business.
“Ophir has strived for years to develop the Fortuna natural gas discovery offshore Equatorial Guinea but hopes of developing the floating liquefied natural gas project have been beset by a lack of funding and a loss of key partners – including industry giant Schlumberger.
“A pivot towards producing assets in South East Asia has been only partly successful and, should a firm takeover offer materialise, long-suffering shareholders may welcome an opportunity to realise some value from their investment.
“There’s not too long to wait for a resolution to the situation with takeover rules dictating Medco must put up or shut up by 28 January at the latest.”
These articles are for information purposes only and are not a personal recommendation or advice.