RBS Strong and Financial Stocks Support FTSE

Financial stocks helped to shield the FTSE 100 from some broad weakness in the markets, as Royal Bank of Scotland proved to be a strong performer.

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shareprices.com - Thursday, January 11, 2018

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Royal Bank of Scotland Group

Banks and insurance companies performed well, responding to a sell-off in US government bonds. This helped HSBC increase by 3.8 percent, while Standard Chartered gained 3.3 percent. RBS gained 4.6 percent, after being boosted further by a broker upgrade to ‘overweight’ coming from Morgan Stanley. In the note, Morgan Stanley informed clients that Morgan Stanley’s recent market share wins in retail, combined with its resilient asset quality, offered better earnings visibility with Brexit looking. Capital generation could allow buybacks worth as much as 20 percent of the bank’s market cap, despite the increasing capital requirements.

Overall, the FTSE closed up by 0.2 percent, hitting another record high. Oil stocks helped to boost the index, with BP and Royal Dutch Shell also hitting multi-year highs. Taylor Wimpey ended the day down by 4.2 percent, and Hikma Pharmaceuticals shed 6.1 percent, coming under pressure because their operations are on hold awaiting a judgement from regulars on their generic Advair. In addition, Hikma are expected to take a writedown on the value of their Roxane business, reflecting the significant destruction of value since they purchased their company.

Meanwhile, transport cafe operator SSP shed 4.3 percent, after they suffered a broker downgrade to underperform from Merrill Lynch, who cited slowing UK trends, and stalling capacity growth, as challenges for the company.

 

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