MARKET REPORT: Global stocks crash over banking meltdown fears
MARKET REPORT: Prudential insists ties to SVB are ‘minimal’, but global price drop sends stocks deep into the red
Insurance giant Prudential insisted its ties to the collapsed Silicon Valley Bank (SVB) were minimal, but its shares were hammered as it was caught up in the global stock market crisis.
The Asia-focused firm revealed it has around £800,000 of exposure to SVB against a total debt portfolio of £19 billion.
“Our exposure to SVB is de minimis,” said James Turner, chief financial officer of the Pru. ‘We are very conservative in positioning our balance sheet.’
Stocks hit: Asia-focused insurance giant Prudential revealed it has around £800,000 in exposure to Silicon Valley Bank against a total debt portfolio of £19bn
But shares fell 12.4 percent, or 147 pence, to 1,036 pence on another brutal day in the financial markets.
The slump came despite the Pru reporting an 8 percent increase in profit for 2022 to £2.8 billion.
It also said business in the first two months of 2023 was supported by the lifting of China’s Covid restrictions, allowing visitors from the mainland to go to Hong Kong and buy insurance again.
Prudential is listed in London but is now focusing solely on Asia and Africa after selling its US and UK arms. The entire senior management team has moved from London to Hong Kong.
However, chief executive Anil Wadhwani said the insurer has no immediate plans to change its UK location.
Sophie Lund-Yates, principal equity analyst at Hargreaves Lansdown, said it was a “solid” first set of results under the new CEO, but added that Prudential “has not done enough to address the concerns of the wider market.”
Those concerns, centered on the banking sector in the wake of the collapse of the SVB and in particular on the health of Credit Suisse, caused the FTSE 100 index to plummet by 3.8 percent, or 292.66 points. to 7344.45, while the FTSE 250 fell 2.6 percent. cents, or 503.81 points, to 18,625.85.
Stock Watch – Trainline
Online train ticket company Trainline has said annual ticket sales fell short of expectations as strikes caused it to take a hit of up to £6 million a day.
But overall group ticket net sales rose 72 per cent to a record £4.3 billion in the year to February 28, when travel recovered from the pandemic.
An increase in demand for international travel boosted revenues, with overseas ticket sales up 95 percent in a three-year comparison.
UK consumer ticket sales were 37 percent higher than in 2019-20.
It rose 1.4 percent, or 3.6 pence, to 255.3 pence.
In London, only six blue-chip stocks were up.
But it wasn’t all doom and gloom. Bloomsbury cheered after sales and profits soared on the back of massive sales of its fantasy novels and academic digital resources.
The Harry Potter publisher said it should have made more than £260 million in revenue and around £30 million in profit for the year to February 28.
This would be more than the £242.6m in revenue and £26.9m profit analysts had expected. Shares rose 6.4 percent, or 27 pence, to 447 pence.
Nigel Newton, general manager of Bloomsbury, said: ‘During a year marked by rising inflation and cost-of-living pressures, it is striking that reading remains extremely popular around the world, with books regarded by many readers as an affordable pastime. are considered.’
Iron ore pellet maker Ferrexpo, which employs more than 95 percent of its 10,000 workers in central Ukraine, said access to the Black Sea remains crucial after its revenue halves by 2022 and pellet production falls by nearly 50 percent.
Shares fell 7.1 percent, or 9.3 pence, to 122 pence.
The mood at IG Group was hardly any better after the exchange saw its number of active customers fall 5 percent to 335,400 in the three months to February 28 compared to the same period a year ago.
It said the market was calmer especially in December.
Shares of the company fell 9.9 percent, or 76.5 pence, to 695.5 pence.
Burberry has poached a replacement for outgoing finance boss Julie Brown from supercar maker McLaren.
The luxury fashion house said Kate Ferry will take over from Brown as chief financial officer in September.
The 50-year-old former retail analyst held senior positions at Dixons Carphone and Talk Talk before joining the McLaren Group as CFO two years ago.
Burberry’s stock fell 3.6 percent, or 84 pence, to 2,249 pence.