Market Report: Morrisons on shelf after shares sell-off
The supermarket chain Morrisons enjoyed a day in the sun last week after it unveiled a 25-year, £170m licensing deal with Ocado to help it launch food online next year. But yesterday, the UK's fourth-biggest grocer was back in the shade after an institutional investor offloaded a large chunk of shares. Morrisons fell 6.7p to 282.6p, while traders waking up to mixed sales data from the supermarket might have also decided to put their money in the baskets of rivals Sainsbury's and Tesco.
The investment bank UBS has placed 103 million shares on behalf of an investor at 280p, although the sale was not thought to be related to the deal with Ocado. The rumour mill pointed to the fund manager Walter Scott & Partners ditching much, if not all, of its 4.6 per cent shareholding in Morrisons. This would represent the second big investor to dump shares in the supermarket this year, following BlackRock slashing its stake from 10 per cent to 3.2 per cent, although Invesco has piled in by raising its holding to 7.5 per cent.
The Bradford-based chain has suffered falling profits over the past 12 months. Morrisons has partly blamed the drop on not selling food online and its limited presence in the fast-growing market for smaller convenience stores, but analysts believe it has lost market share to the German discounters, Aldi and Lidl, in its northern heartland.
Though there are signs that Morrisons' performance has improved recently, its sales growth of 1.2 per cent lagged behind its big rivals over the 12 weeks to 12 May, according to this week's closely followed Kantar Worldpanel data.
The movement in the supermarket's shares came on a day that the FTSE 100 index rose by 36.4 points to 6,840.3. This propelled the market to its highest level since December 1999.
It was also a day to remember for mining companies, following the price of copper reaching a five-week high in New York. This was partly driven by concerns that a significant accident at Freeport-McMoRan Copper & Gold's mine in Indonesia, which has killed at least 28 workers, could restrict global supplies. Copper for delivery in July rose by 2 per cent to $3.41 a pound yesterday, which helped to send the Chile-based miner Antofagasta up by 38p to 1,002p and to the top of the London share chart.
Among other mining groups, Anglo American rose by 32p to 1,653.5p and Rio Tinto jumped by 63.5p to 3,042.5p.
Another star performer was the budget airline easyJet, which has seen its shares take off since Carolyn McCall joined as chief executive in July 2010. It soared 33p to 1,285p yesterday, continuing its upward trajectory. EasyJet has rocketed by 68 per cent this year, and joined the benchmark index in March.
Lloyds Banking Group was in vogue after boasting it would meet new capital requirements without having to resort to issuing new equity following discussions with the banking regulator, the Prudential Regulation Authority. This lifted the part state-owned bank 1.4p to 63p.
Royal Bank of Scotland made similar noises yesterday, and it climbed 7.4p to 349.6p, while this reassurance also lifted a rival, Barclays, which climbed by 10.6p to 333.9p, making it the FTSE 100's second-biggest riser.
In contrast, the luxury brand Burberry was firmly out of fashion, pointing to profit-taking among traders after it posted strong earnings on Tuesday. Soaring demand in China for luxury fashions drove a 14 per cent spike in Burberry's profits to £428m in the year to March, but yesterday its shares were marked down by 9p to 1,532p.
Also out of favour was the chip designer Arm Holdings, as this week's investor day failed to work its magic on the City. Some analysts, such as those at Numis and Bank of America Merrill Lynch, gave the incoming chief executive Simon Segar's long-term vision for Arm a lukewarm response, despite continuing buoyant demand for the company's chips in the smartphones of most of the biggest manufacturers. It fell 15p to 1,050p.
Richard Curr, head of dealing at Prime Markets, said: "Arm's market share is of course coveted by its rivals, and the move by Intel to grow market share in mobile technology is likely to impact on Arm at some point, in spite of the Cambridge-based group's relative dominance."
The benchmark index's wooden spoon went to the broadcast giant BSkyB, down by 19.5p to 779p. This followed an uplift at the media company on Tuesday after it bought back 700,000 shares at an average price of 800p.
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