FTSE 100 nears 11% gain this year and Trainline chugs on to the UK stock market

“The FTSE 100 is on track to end the week around the 7,450 mark, putting it back up at highs previously seen in April and at nearly an 11% gain year-to-date.

“Financial stocks were in vogue with notable gains from Prudential, Barclays and Royal Bank of Scotland. Oil giant Royal Dutch Shell also gave the blue chip index a lift,” says Russ Mould, Investment Director at AJ Bell.


“While the stock market debut of train and bus ticket seller Trainline was never going to attract the same fanfare of high profile US IPOs like Beyond Meat and Slack, its first day performance is still fairly decent.

“Having been priced at the upper end of expectations, Trainline’s shares have subsequently jumped 14% to 400p on their first day of dealings. That means the business is now worth approximately £1.9 billion which is bigger than three of the four London-listed train and bus operators: FirstGroup, Go-Ahead and Stagecoach. The only operator worth more than Trainline is National Express at £2 billion.

“Trainline is an easy proposition to understand. Its system aggregates millions of routes, fares and journey times from 220 rail and coach carriers across 45 countries, giving consumers an easy way to book their travel tickets.

“It isn’t the cheapest ticket seller in the UK when you take into account fees – the big train companies will sell you a ticket with no fees at all, for example. However, the convenience factor means a large number of travellers are happy to use Trainline for all their transportation booking.

“The business was previously scheduled to float on the UK stock market in 2015 but was snapped up by private equity firm KKR at the eleventh hour for approximately £450m. A year later Trainline bought French rival Capital Train.

“Investors should always be slightly careful about former private equity-owned businesses that arrive on the stock market as many of them have suffered from underinvestment and are weighed down by excessive amounts of debt.”

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.