Pages

Tuesday, September 29, 2015

FTSE falls again despite Glencore rising, as Wolseley slumps on outlook

Investors remain nervous of volatile markets ahead of Chinese data Following Monday’s rout leading shares are on the slide again despite a recovery - albeit an unconvincing one - in commodity shares. WOLSELEY is the biggest faller, down 439p or more than 10% to £37.40 after the building materials group lowered its guidance for revenue growth from 6% to 4%. It said north American markets would remain challenging and also said there would be little growth in the UK. The fall came despite an 11% rise in full year trading profit and plans for a £300m share buy back. During the summer the markets were spooked by the Greek debt crisis and its possible impact on the stability of the eurozone. Now the focus is on the slowdown in the emerging markets and there seems no end to the bad news. The latest surprise is India cutting its interest rate for the fourth time this year. A solid pre-close update, signalling a good start to the year driven by organic growth momentum. The group has also provided clarification on the issue of the National Living Wage, indicating its confidence that this will not have a material impact on future earnings. Mitie is now a pure-play services business, with a significantly reduced risk profile following its exit from the construction market. Today’s statement should reassure on many fronts and, on a 2016 estimated PE of just 11.5 times, the shares represent good value in our view. Buy. Continue reading...


READ THE ORIGINAL POST AT www.theguardian.com