FirstGroup, HSBC & Man Lead FTSE Lower

The FTSE 100 index opened lower on Wednesday and continued into the red in early trading on the back of trading statements from transport operator FirstGroup and hedge fund manager Man Group and concerns about the capital position of HSBC.

Michael Parker
shareprices.com - Wednesday, January 14, 2009

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FirstGroup reported in its Interim Management Statement that despite revenue growth of over 7% in both its bus and rail division in the United Kingdom in the third quarter of 2008, like-for-like revenue in Greyhound in the United States was down 4.5%. Man Group – the largest hedge fund manager in the world by market value – similarly reported that its fund under management fell 21%, from $67.6 billion to $53.3 billion during the final quarter of 2008. Man Group is to sue over its exposure to the $50 billion "Ponzi scheme" alledgedly perpetrated by U.S. financier, Bernard Madoff, and said that the fall was the result of reducing risk in a proportion of its product range.

Share prices in HSBC, the biggest bank in Europe, also fell sharply – 37p to 603p the lowest level since 2001 – as a sell-off of shares in Asia was reflected on the London Stock Exchange. According to leading analysts, Morgan Stanley, HSBC may need to raise £20 billion in a rights issue and halve its dividend. Overall, the FTSE 100 index was down 43, at 4,355 early on Wednesday.

In other news it was announced that Royal Bank of Scotland (RBS) has sold its entire stake in Bank of China – a total of nearly 11 billion shares realising £1.6 billion – only months after the British Government took a stake of nearly 60% in the bank.

 

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