Market Report: Tesco online move gloomy for Ocado

  • @ukmoneyguru

An Arctic blast hit Ocado's shares yesterday as the online grocery retailer felt more of the chill wind of competition from giant Tesco. The decision of Tesco to open a host of ominously called "dark stores" is to blame for Ocado's latest travails.

Dark stores are not open to the public but are instead geared towards fulfilling online orders only. The threat to the already under-pressure Ocado business model is obvious. Oriel Securities in a note concluded: "This is all bad news for Ocado. It is already struggling to keep up with the industry and further focus from the majors has to be bad news."

Dark store sites are to open in Crawley and Erith in the South East but it is believed Tesco is also set to expand in Manchester and Birmingham. Ocado's share price has struggled since it listed in 2011, and has lost almost half its value since late March. It yesterday fell 0.45p to 64.5p.

Sharing a holiday with hundreds of perfect strangers doesn't float my boat but it seems I am increasingly alone in this. Global cruise company Carnival Corporation, which owns P&O cruises, reported pre-tax profits of £819m for the three months to the end of August. This was broadly in line with the same quarter last year. The company, which owned the Costa Concordia ship that capsized in a fatal grounding earlier this year, reported an 8 per cent slide in revenues to £2.8bn but promised a recovery in cruise-ticket prices in the second quarter of 2013. In addition, management said it would increasingly target emerging-market economies to secure growth. This seemed enough to buoy the share price, which gained 76p to 2342p.

It was perhaps somewhere under the flashing lights and fireworks of the Singapore Grand Prix last weekend that a hushed conversation about the fate of emerging-markets bank Standard Chartered took place. But maybe the conversation wasn't quite hushed enough. It has emerged that Singapore's state-owned investment fund Temasek has started talking to buyers about selling its £6bn, 18 per cent stake in the FTSE 100 bank.

It could herald more than just a stake sale. Cormac Leech, banking analyst at Liberum Capital, reckons Standard Chartered, whose logoed skyscraper looms large over Singapore, may have a takeover on its own horizon. Leech flags up the fact that JP Morgan was floated as a likely bidder in the past, and adds: "It's likely the Chinese banks such as BoComm could find also significant revenue synergies [from a Standard Chartered acquisition]. StanChart is widely seen as a unique franchise given its pan Asia/Middle East/Africa footprint and comprehensive wholesale banking product offering."

Simon Willis at Daniel Stewart was also zipping through potential buyers. "A Chinese bank or the sovereign wealth fund; or a Middle Eastern sovereign wealth fund," he mused. "The former is the more likely... though Standard Chartered clearly has no need to sell out, and certainly not on the cheap."

Although the bank's shares last month lost a fifth of their value after regulators accused it of breaking US sanctions on Iran, a $340m (£210m) settlement swept the problem away and the shares rebounded. Yesterday, however, they were 23p cheaper at 1457.5p.

Falkland Oil & Gas put on some weight after it said it had started drilling the Scotia exploration well, east of Port Stanley. The firm reckons it will take two-and-a-half months to complete 5,000 metres of drilling.

Falkland Oil operates the well and has a 75 per cent stake in the project, but that will drop to 40 per cent after the firm agreed a farm-out deal with Noble Energy. Falkland shares rose 1.25p to 69p.

Back in the UK, Aim-listed mining business Hargreaves Services warned that Rotherham's Maltby Colliery is at risk of closure because of geological problem The shares fell 143p to 551p.

The best US consumer confidence figures since February helped the FTSE 100 index reverse early losses. The survey showed consumers were more optimistic about the availability of jobs and their outlook over the next six months. A measure of how consumers feel about the economy rose to 50.2 from 46.5 last month – and they are even more optimistic about the next six months.

As a result, share prices moved into positive territory mid-afternoon and carried on their rise, with the index gaining 20.97 points at 5859.70.