SHARES of British Airways went into a nosedive today as the fallout from this week’s chaos at Heathrow caused by industrial action began to be felt.
Shares of the national carrier were among the biggest fallers in second liners with a loss of 81/4p to 1643/4p as more than six million changed hands. The dispute centres on the introduction of swipe cards for ground crew to monitor their working hours. Talks between BA and the unions broke down in the early hours of this morning and further industrial action is imminent.
Another round of strikes could prove costly.
Last weekend’s action, which has been described as a public relations disaster, is estimated to have cost BA between 20 million and 40 million in lost revenue. It is now taking a heavy toll on the share price. Brokers say a long, drawn-out dispute could see BA lose an opportunity to regain its place as a FTSE 100 constituent in September’s quarterly reshuffle.
Newcomer Yell is still finding the going hard. Floated earlier this month at 285p, the shares rallied 1p to match the original offer price, but buyers remain thin on the ground.
The float of the Yellow Pages directory group was the biggest in two years, the shares offered exclusively by its financial advisers Goldman Sachs and Merrill Lynch to institutional investors. It has traded as high as 306p, on the first day, and as low as 2763/4p, meaning private investors – who have shown little appetite – must be breathing a sigh of relief.
Share prices generally ticked better despite some disappointing corporate news.
Encouraged by a strong rally for the Dow in New York yesterday, the FTSE 100 index rose
Reuters rallied 31/2p to 2041/4p on further reflection on yesterday’s interim results, showing the group returning to the black following big cost-cutting. US securities house Morgan Stanley has repeated its overweight stance and raised its target price 10p to 240p.
Rival Goldman Sachs, which has placed a big order with the news and financial information supplier, has an outperform rating on the shares with a fair value price of 246p.
It has also lifted its earnings estimate for this year by 61% and for 2004 by 14%.
Hedge fund Lansdowne Partners Limited Partnership has bought an extra 180,000 shares in Manchester United, down 8p at 153p, raising its total holding to 16.65 million shares, or 6.03%.
Wembley stood out with a rise of 48p to 701p following reports that Bank of Scotland, part of HBOS, may want to team up with Active Value to make a bid for the gaming group.
Software specialist Isoft Holdings rose 161/2p to 3231/2p with computerservices group Torex adding 14p to 5511/2p on further reflection of their proposed 700 million merger to create Britain’s leading provider of healthcare information systems. The enlarged group hopes to scoop a bigger slice of the 2.3 billion NHS modernisation programme.
Life assurer St James’s Place Capital tumbled 161/2p to 1131/2p as broker Merrill Lynch turned seller ahead of interim results which are expected to make depressing reading.
Eurasia Mining rose 1/2p to 71/4p after saying new tests had revealed significant platinum resources in the Baranchinsky licence in the Russian Urals.
. Prices and indices in this section are supplied from various sources and calculated at different times and may not always match those listed in the tables. Ofex prices relate to the previous close.
