FTSE 100 movers: Ocado retreats; Glencore boosted by upgrade
London’s FTSE 100 was down 0.6% at 7,304.75 in afternoon trade on Monday amid renewed concerns about Sino-US trade relations.
Ocado was the standout loser on the index after the online grocer announced a £500m bond issue to help fund its Ocado Solutions business and for general corporate purposes.
The guaranteed senior unsecured convertible bonds, due 2025, will carry a coupon of between 0.75% and 1.25% a year. They have a conversion price premium of between 40% and 45%.
"The offering enables Ocado Group to diversify its funding sources and capitalise on attractive issuance conditions," it said.
Shore Capital said: "What surprises us is the need by Ocado for the capital, which it states largely relates to its Solutions business, reiterating the funds received recently from Marks & Spencer, bearing in mind that it is not so long since the Group undertook a major equity fund raise.
"What this suggests to us is that Ocado remains very ambitious but also highly cash consumptive. The group simply does not fund its ambitions from anywhere near its operating cash flow after approaching twenty years of trading, which depletes return on capital employed, an important measure of how management earns from its assets."
Travel company TUI was knocked lower by a downgrade to ‘market perform’ from ‘outperform’ at Bernstein.
Going the other way, Glencore was on the rise after RBC Capital Markets upped its stance on the miner to ‘outperform’ from ‘sector perform’.
"Glencore has underperformed the FTSE 350 mining index by around 36% since the end of 2017 when significant divergence started to show. We calculate 23% implied upside to our heavily discounted valuation and as such, move the rating to outperform," it said.
FTSE 100 - Risers
Evraz (EVR) 377.10p 1.81%
Bunzl (BNZL) 2,151.00p 1.32%
Auto Trader Group (AUTO) 569.00p 1.25%
Royal Dutch Shell 'B' (RDSB) 2,214.00p 1.12%
Melrose Industries (MRO) 232.00p 1.05%
Morrison (Wm) Supermarkets (MRW) 200.30p 1.01%
BP (BP.) 484.75p 0.95%
Johnson Matthey (JMAT) 2,899.00p 0.87%
Kingfisher (KGF) 211.50p 0.76%
Glencore (GLEN) 245.75p 0.76%
FTSE 100 - Fallers
Ocado Group (OCDO) 1,234.50p -6.83%
TUI AG Reg Shs (DI) (TUI) 1,023.50p -3.76%
SEGRO (SGRO) 871.80p -2.48%
Burberry Group (BRBY) 2,053.00p -2.42%
Hiscox Limited (DI) (HSX) 1,332.00p -2.27%
Hargreaves Lansdown (HL.) 1,818.50p -1.97%
Royal Bank of Scotland Group (RBS) 222.30p -1.72%
Vodafone Group (VOD) 150.84p -1.64%
Fresnillo (FRES) 568.20p -1.63%
Severn Trent (SVT) 2,208.00p -1.56%