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Stocks slip, Debenhams higher after Ashley offer

stocks lower markets down

stocks lower markets down

Stocks are a little lower this morning as dealers in Europe take their cues from the subdued Asian session. 

Over the weekend, Chinese state TV claimed that additional progress was made in relation to US trade talks. A Chinese government website announced on Sunday that the state authorities said it would push for a reduction in the reserve requirement ratio at banks in order to boost lending. Stimulus polices are often viewed in a positive light, and should Beijing deliver on its pledge we should see a boost to sentiment.  

Debenhams shares have jumped today after Mike Ashley offered to underwrite the company’s rights issue. Mr Ashley owns a 30% stake in the struggling retailer and he has now proposed to underwrite the £150 million capital raising initiative, and should the move go ahead, it would prevent the existing shareholder value from being wiped out by a debt for equity swap. Debenhams board of directors haven’t too keen on Mike Ashley’s advances, and now that Mr Ashley called on regulators to investigate the management of the firm, his latest offer might not go anywhere.

Unite Group confirmed that property valuations edged up by 1.5% on a quarterly basis, and the update today bodes well for the group’s outlook of between 3% and 3.5% growth. The group owns and manages student accommodation, and it stated reservations for the academic year 2019-2020 were currently 79%, and that was an improvement on the 77% one year ago. The stock reached another all-time high last week and if the bullish move continues it might target 1,000p.

Petra Diamond shares are higher this morning after Berenberg upped its price target for the stock to 23p from 22p

A broad sell-off in the US dollar index today has lifted GBP/USD and EUR/USD. Investment sentiment in the eurozne is still weak as the Sentix investor confidence reading was -0.3, which was an improvement on the -2.2 reading in March. It is worth noting that the reading has been negative for five consecutive months.  

Boeing recently announced plans to cut production of 737 Max aircrafts by 20% in light of the Ethiopian airlines disaster last month. Shares in Melrose and Meggitt are lower today as the ripple out effect within the aerospace and engineering will equate to fewer orders across the board.   


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