FTSE 250 movers: Plus500 tumbles, oilers bubble up
By Duncan Ferris
Date: Tuesday 12 Feb 2019
(Sharecast News) - London's FTSE 250 gave up its early gains and finished just below flat 18,824.78 on Tuesday, with Plus500 dragging the index lower as its shares plummeted on profit uncertainty.
The online trading services provider tumbled as it warned that 2019 profit would be "materially lower" than market expectations due to new European Union regulations on financial products.
Berenberg analysts said the company had enjoyed a "great year", followed an "exceptionally strong first quarter", though admitting that new regulations and a rise in marketing spend could result in forecast reductions.
"Although this is disappointing in the short term, Plus500 has an attractive business model (high margin, cash generative and capital light), its revenues are positively correlated with financial market volatility, and the regulatory impact has now been quantified, which removes the major uncertainty facing the stock. We therefore retain our 'buy' recommendation," said a note from the broker.
Fellow trading platform IG Group Holdings also dropped at the news of Plus500's dented expectations, even though it has a higher proportion of professional-level clients, that escape the tighter European regulations. "IG have been talking about the impact of ESMA for months now so whilst there may be some read across today although I see it as limited," said Jamie Constable at broker N+1Singer.
Britvic lost some of its fizz dropped after Morgan Stanley dropped the drinks maker from 'overweight' to 'equal-weight' with a target price of 900p, while thread-maker Coats Group unravelled somewhat after being initiated at 'reduce' by HSBC with a target price of 70p.
Indivior was in the red after saying it will petition the US Supreme Court to block a decision by the Court of Appeals of the Federal Circuit to allow other companies to sell their generic versions of its anti-opioid treatment. The company said it assumes that both Dr Reddy's Laboratories and Alvogen Pine Brook will launch their copycat versions of its Suboxone Film "at risk" of pending court judgments.
Meanwhile, leading the risers were oil producers Premier Oil and Tullow Oil, along with oil and gas industry services provider Hunting, which all jumped after OPEC-led production cuts caused oil prices to climb by more than 2%.
The organisation slashed production as it cut its forecast for 2019 world oil demand due to economic slowdown and expectations of faster supply growth from rivals.
Finally, medical products and technologies company Convatec also climbed ahead of the release of its final results on Thursday.
Market Movers
FTSE 250 (MCX) 18,807.50 -0.13%
FTSE 250 - Risers
Premier Oil (PMO) 71.57p 3.95%
Bakkavor Group (BAKK) 145.00p 3.57%
Halfords Group (HFD) 239.40p 2.92%
Hunting (HTG) 549.00p 2.52%
Hays (HAS) 155.20p 2.44%
Ted Baker (TED) 1,927.00p 2.28%
Tullow Oil (TLW) 208.20p 2.06%
Convatec Group (CTEC) 146.55p 2.05%
Baillie Gifford Japan Trust (BGFD) 733.75p 2.05%
Superdry (SDRY) 503.00p 2.03%
FTSE 250 - Fallers
Plus500 Ltd (DI) (PLUS) 1,137.00p -30.50%
IG Group Holdings (IGG) 583.50p -5.43%
Daejan Holdings (DJAN) 5,780.00p -3.83%
Britvic (BVIC) 886.50p -2.80%
Millennium & Copthorne Hotels (MLC) 469.00p -2.60%
Hochschild Mining (HOC) 187.50p -2.47%
Petrofac Ltd. (PFC) 379.80p -2.24%
Unite Group (UTG) 880.00p -1.95%
Indivior (INDV) 105.20p -1.73%
Coats Group (COA) 87.80p -1.68%
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