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