MARKET REPORT: Royal Mail plunges as staff plan more strikes

Shares in Royal Mail hit a two-year low as it remained embroiled in a union dispute.

The Communication Workers Union (CWU) has announced another 19 days of strike at the postal group between October and November.

Shares fell 3.5 percent, or 6.85p, to 187.2p, but there was a glimmer of hope after the CWU said Royal Mail agreed to further talks today. If no solution can be found, the strikes will fall on some of Royal Mail’s peak days.

Workers want a pay rise but after a £92m loss in the first quarter, Royal Mail said last week the CWU has not outlined ‘viable alternatives that will fund further pay rises’.

It also called for talks with Acas, the dispute resolution service, in addition to modernizing the way it works with the union.

JP Morgan analysts believe strikes will encourage customers to use rivals, and Peel Hunt reiterated a “sell” recommendation. Royal Mail floated at 330 pence in 2013. It is now worth around £1.85 billion and its shares are down 63 percent this year.

On another turbulent day in London, the FTSE 100 rose 0.3 percent or 20.8 points to 7005.39 and the FTSE 250 rose 0.1 percent or 16.86 points to 17,320.97.

A sharp warning from the International Monetary Fund (IMF) was followed by a dramatic intervention in the bond markets by the Bank of England in an attempt to restore calm.

Concerns about the health of UK pension funds amid bond markets prompted L&G, the UK’s largest provider of occupational pensions, to plunge 5.6 percent or 13.1p to 220.3p, while investment group M&G fell 6.2 percent or 11.1p fell to 168p and insurer Aviva fell 4.9 percent or 19.9p to 389p.

Inventory Monitoring – CML Microsystems

CML Microsystems rose as a positive update cheered investors. Ahead of interim results in November, the electronic chip maker said it enjoyed “strong” trading during the six months to the end of September.

The AIM-listed company expects to generate much more revenue than last year, thanks to favorable exchange rates.

As a result, CML said it now expects revenue and profit for the year to exceed market expectations. Shares were up 11.7 percent, or 41p, to 391p.

There was better news for Spirax Sarco after it acquired the £307.5 million US company Durex, which makes temperature sensors used to build semiconductors. The engineer, who took over Paris industrial heating company Vulcanic in July, rose 2.5 percent, or 255p, to 10385p.

Wetherspoons was among the largest decliners on the midcap index — down 4.3 percent, or 19.4p, to 429.2p — after Liberum analysts released a bleak outlook.

Ahead of the pub group’s preliminary results on October 7, the broker cut the target price from 600p to 450p and said the company’s current trading has likely remained “muted”.

Aston Martin hit rock bottom when the luxury car maker completed its £575.8 million rights issue. As analysts were unsure whether the massive debt could be reduced, it fell 5 percent, or 7.55p, to 142.25p.

Airport caterer SSP fell 1.1 pc or 2.3 pence to 207.1 p after mixed broker reports. The company, which owns Upper Crust and Millie’s Cookies, had its target price raised by Morgan Stanley but lowered by Stifel and Deutsche Bank.

Meanwhile, Credit Suisse lowered Deliveroo’s target price to 114p from 130p. But shares were up 3.8 percent, or 3.24p, to 87.8p.

A co-founder of I3 Energy has resigned as Chief Financial Officer.

Graham Heath, who helped set up the oil and gas company in 2014, is leaving immediately. Shares rose 1.8 percent, or 0.4p, to 23.65p.

Fuel cell maker Ceres Power took a hit after Boston-based Fidelity Investments cut its stake.

The stock fell 2.1 percent, or 8.2p, to 383.8p. Amigo Holdings became the latest company to be rocked by a shareholder revolt over fat cat payments.

At the annual general meeting, 45 percent voted against the lender’s remuneration report. Shares rose 5.9 percent, or 0.22p, to 4.02p.

Getech praised its ‘critical role in energy security’ as it rose 3 per cent, or 0.5p, to 17.25p after its order book hit an all-time high, up 118 per cent to £4.8m in the six months to 30 June The energy software company said sales rose 11 percent to £2.7 million.