Cambridge Index sinks 5.5%

13/02/2018

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The Cambridge Index declined 5.5% or 1,412.8 points to settle at 24,154.9, as most of the Index heavyweights posted weekly losses to their share prices.

Johnson Matthey, down 6.8%, announced that a contract dispute lawsuit against Johnson Matthey Inc. in the US has been settled with mutual interest and the company will pay a charge of £50m. Moreover, the company expects a positive impact of the US tax legislation on its business with effective tax rate to be around 18.0%.

Goldman Sachs raised its target price on DS Smith, down 6.1%, to 500p from 485p and maintained a “Neutral” rating. Peel Hunt reissued its “Buy” rating on the stock with a target price of 575p.

Deutsche Bank reduced its target price on Greene King, down 1.4%, to 740p from 830p and gave a “Buy” rating. Numis Securities reiterated its “Hold” rating on the stock with a target price of 595p.

Elektron Technology, up 10.3%, in its trading update, announced that it anticipates revenue for the year ended 31 January 2018 to advance 10.9% to £30.5m from £27.5m in the last year. The trading performance of the second half of the year was considerably stronger than the first half, mainly due to the conversion of Bulgin's order book to sales revenue.

Amino Technologies, down 1.8%, announced that its annual revenues slightly rose to £75.3m from £75.2m reported last year. Moreover, its profit before tax surged to £9.6m from £2.8m, while its basic earnings per share increased to 15.49p from 13.81p. The company’s board recommended a final dividend of 6.66p per share. Separately, the company announced the appointment of Steve McKay and Michael Clegg as the new Non-Executive Directors. Also, Amino declared joining of David Perez and Joachim Bergman as Senior Vice President Sales and Marketing and Senior Vice President of Cloud Services, respectively.

Numis Securities reissued its “Buy” rating on RhythmOne, down 4.5%. Gaming Realms, down 5.0%, today announced a licensing agreement with ITV to host new games under its brand, tellygames.com.

Frontier Developments, down 18.6%, announced that its half-yearly revenues advanced to £18.9m from £18.1m reported in the same period previous year. However, its profit before tax fell to £2.9m from £3.6m reported in the last year. FinnCap restated its “Corporate” rating on the stock with a target price of 1700p.

UK markets ended in negative territoy last week, on the back of a hawkish comments from the Bank of England on future pace of interest rate hikes. Additionally, British services sector grew at its slowest pace in sixteen months in January, while industrial output fell to an almost five-year low in December. The FTSE AIM 100 index declined 5.5% to close at 5,163.1, while the FTSE 100 index dropped 4.7% to settle at 7,092.4. Moreover, the FTSE techMARK 100 index lost 4.1% to end at 4,257.5.

US markets closed lower in the previous week, amid fears that the US Federal Reserve might increase interest rates at a faster than expected pace amid mounting inflationary pressures. On the data front, the US trade deficit widened to its highest level in nine years in December. Meanwhile, the number of Americans applying for jobless benefits unexpectedly dropped to its lowest level in nearly 45 years in the last week. Also, the US ISM non-manufacturing PMI rose more-than-expected in January. The DJIA index dropped 5.2% to end at 24,190.9, while the NASDAQ index lost 5.1% to close at 6,874.5.


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