Speaker 1: Bloomberg Audio Studios, Podcasts, radio News, The.
Speaker 2: Stock Movers Report, your roundup of companies making moves in
Speaker 2: the stock market, harnessing the power of Bloomberg Data.
Speaker 3: Let's take a look at some of the stocks on
Speaker 3: the move today in Europe. I'm Teama Adabay with Stephen Carroll,
Speaker 3: and we're joined by Bloomberg's Breaking News editor Louise Moon. Louise,
Speaker 3: let's start with wh Smith. A double digit slump for shares.
Speaker 3: What's happened?
Speaker 1: Yeah, so eighteen percent the last time I looked in
Speaker 1: terms of their share slump this morning, so it's more
Speaker 1: woes essentially for wh Smith. So this morning they warned
Speaker 1: on their profits for the year essentially citing a few things.
Speaker 2: One main thing being.
Speaker 1: The uncertainty for the Middle East what obviously that's causing
Speaker 1: a lot of travel disruption and wh Smith is focused
Speaker 1: now having sold off its high street business on the
Speaker 1: travel sector in airports and the like, so partly on
Speaker 1: that Middleast and then partly their US business being weaker
Speaker 1: there citing weaker consumer demand there. They've launched a capital
Speaker 1: raise to strengthen their balance sheets. That's about twenty six
Speaker 1: million shares, which is about twenty percent of their existing
Speaker 1: share capitals. That's to try and boost things, and obviously
Speaker 1: it follows a really rough past year for w Smith.
Speaker 1: So as I mentioned, they've they sold off their high
Speaker 1: Tree business which to focus on travel, which is bad
Speaker 1: timing given what has now ensued in the travel sector.
Speaker 1: They had a probe over overstating their profits in the
Speaker 1: US that continues to hang over their stock and also
Speaker 1: resulted in their CEO resigning. And then now as I've mentioned,
Speaker 1: this travel disruption, So a lot of woes for wh
Speaker 1: Smith to battle. As I say, shares down about eighteen
Speaker 1: percent this morning, they already lost as of yesterday's clothes,
Speaker 1: they'd already lost about fifty percent over the past year.
Speaker 1: So yeah, it's as I say that they're launching a
Speaker 1: capital raise to try and strengthen things, but they've got
Speaker 1: a lot to kind of battle through. And luis in
Speaker 1: the banking sector or watching HSBC shares lower two percent
Speaker 1: in London this morning, and this is linked to fears
Speaker 1: of a regulation in China. Indeed, Yeah, so HSBC also
Speaker 1: Standard Charter both lower in London as well as Hong
Speaker 1: Kong both dual listed, and they're actually the worst performance
Speaker 1: on the stock six hundred bank Banks index across Europe's.
Speaker 1: As you say, this is linked to China. So there's
Speaker 1: been a note from JP Morgan analysts saying that new
Speaker 1: regulations in China will essentially make entry of new money
Speaker 1: into private banking harder than was previously expected. So there's
Speaker 1: It cites things like higher compliance costs, more due diligence requirements,
Speaker 1: so a lot of friction for that new money to enter.
Speaker 1: What it does is then create uncertainty around the wealth
Speaker 1: management businesses for these banks that are exposed to China,
Speaker 1: and that's something that's HPEC in particular has been pushing
Speaker 1: into and that's likely that uncertainty is likely to persist,
Speaker 1: could lead to slower earnings growth. And JP Morgan analysts
Speaker 1: citing that particul saying that you know, they're estimating that
Speaker 1: the downside risk to EPs could be about four or
Speaker 1: five percent for both of those banks. So shares reacting
Speaker 1: on the back of that.
Speaker 3: Okay, so latest from the banking sector. But I know
Speaker 3: you've also been looking at the impact of M and
Speaker 3: A in the telecoms sector in UK.
Speaker 1: Yeah, so yesterday afternoon there was a report for the
Speaker 1: FT saying that Vodaphones three was one of a number
Speaker 1: of companies that had submitted second round bids for Talk
Speaker 1: Talks consumer units, so Telecom's m and a there BT
Speaker 1: reacted on the back of that. So this was quite
Speaker 1: late yesday afternoon, they fell as much as about eight percent,
Speaker 1: and they closed yesterday three point five or so percent lower.
Speaker 1: This morning, those BT shares are actually ticking higher, a
Speaker 1: bit of a change in sentiments. So initially there'd been
Speaker 1: worries over the risk to BT if that deal were
Speaker 1: to come to fruition, worries over you know, revenue risks
Speaker 1: in terms of their their broadband so most of Talk
Speaker 1: Talks lines rely on open Reach, which is owned by BT,
Speaker 1: so that if talk Talk or that unit of talk
Speaker 1: Talk were to be bought by vote Voon three, you know,
Speaker 1: would that business move elsewhere so and impact BT's revenue.
Speaker 1: This morning, actually, and Liss is saying that they don't
Speaker 1: actually expect if this were as I say, that there's
Speaker 1: still works happen, they don't expect much initial disruption. So
Speaker 1: Berenberger saying that Bloomberg Intelligence also saying that so limited
Speaker 1: near term threat of Talk Talk kind of diverting revenue
Speaker 1: away from BT elsewhere. So shares, as I say, slightly
Speaker 1: high this morning, a bit more optimistic on that potential
Speaker 1: M and A, so up about one percent after that slump, pissing.
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