Thu, 10th Jul 2014
The FTSE 100 slipped to a two-month low point on Wednesday, with Admiral and Aviva among the poorest performers of the day. Car insurance company Admiral saw its share price slip by 3.3 percent after announcing that it had seen its revenues fall for the first half of the year and warning that it had not seen any evidence of a return to growth for UK car insurance premiums.
Admiral said that it has plans to launch its first ever bond, which would be worth up to 200 million pounds, in a bid to diversify its capital base. The company is preparing to meet the Solvency II regulations for 2016.
The news cause Oriel Securities to reiterate its sell rating for the company, and Berenberg warned that a likely fall in margins was not being reflected by the earnings forecasts. Peter Eliot, an analyst with Berenberg, said that they expected to see the earnings forecasts reduced further in the near future.
Aviva's share price slipped by 3.6 percent, as the insurer said that they aim to double the amount of excess cash that they are generating during the next stage of their ongoing turnaround plan. However, there are many analysts who are concerned that their plan does not go far enough.
Overall, the FTSE 100 was down by 0.3 percent, at 6,718.04, after briefly peaking at 6,740.82 during the middle of the session. This is the second significant slip for the FTSE this week. The index suffered a 1.25 percent fall - its biggest since March, on Tuesday.