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FTSE falls on UK construction data while Coca-Cola HBC drops after update

Discussion in 'Market News' started by Lily, May 13, 2016.

  1. Lily

    Lily Forum Member

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    Investors unsettled by fall in oil price and US interest rate comments

    Leading shares are slipping back again after disappointing UK construction figures, falls in Asia overnight and a decline in oil prices.

    Coca-Cola HBC, one of the drinks group’s bottlers, is among the biggest losers, down 55p at £13.42 following news that first quarter revenues had fallen by 2.7%. The company was hit by weak emerging market currencies and the strength of the euro. Analyst Phil Carroll at Shore Capital said:

    Overall, a slight miss from a forecasts perspective but the underlying performance was slightly stronger than the figures suggest due to one less trading day. We continue to see forecast risk as we move towards the seasonally more important summer trading months from both foreign exchange especially in relation to Nigeria and the beneficial trading conditions from the warmer summer weather in a number of European markets last year. Therefore, on a 2016 forecast valuation of 19.1 times and an enterprise value/EBITDA ratio of 9.0 times, we retain our sell recommendation.

    A weak finish on Wall Street combined with a disappointing Asian session has once again set the pace for London equities as Friday’s trade gets underway. A break below the 6,000 level is certainly something that cannot be overlooked and that would be the first time in almost three months that we’ve been down here.

    Looking ahead, US advance retail sales figures will be under close scrutiny later in the session as investors desperately need something to cheer. Yesterday’s surprise jump in weekly jobless claims across the Atlantic added more misery into markets globally so it could be that even mild disappointment here is all it will take to lead London’s blue chip territory to within a whisker of the 6,000 mark.

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