FTSE in-depth: Gartmore share boost hits rivals
In a desperate move to keep more staff from following star fund manager Roger Guy out of the door, Gartmore on Friday raised eyebrows in the City by awarding key employees bumper share awards.
Geoff Foster: The Footsie advanced 40 points before pulling up lame.
News of the lock-in has gone down like a lead balloon. Particularly as rumours doing the rounds suggest Goldman Sachs is having major problems in finding a buyer for the beleaguered fund management group.
Hungry bears again savaged the shares, which plummeted to a low of 95p before they closed 11.9p, or 11%, cheaper at 98.05p. Last December's flotation price was 220p.
Gartmore has diluted the total number of shares on offer by 15% to incentivise staff. John Bennett, who is now regarded as Top Gun and is apparently running Guy's European Large Cap Fund, is the biggest beneficiary.
He has been awarded a staggering 9m new shares to take his total shareholding up to 11m. Chief executive Jeffrey Meyer gets 3m new shares, while global head of distribition Phil Wagstaff has received 2m.
In a recent note, analyst Sarah Ing at Singer Capital Markets, said that Gartmore needed to act swiftly to protect its assets. She believes that almost all of the £3.5bn of assets managed by Roger Guy are likely to walk out the door and that it could haemorrhage further funds during this period of uncertainty.
As Ireland moved closer to a European Union-led bailout, the Footsie advanced 40 points before pulling up lame. Selling left the close 52 points lower at 5,680.83 with late sentiment not helped by an early 76 point decline on Wall Street.
Broker Matrix warned that just as the rescue of Greece proved ineffectual in stopping contagion, the confirmed aid package for Ireland will not prevent further deterioration of the sovereign debt crisis. U
UK banks with the biggest exposure to Ireland and other struggling eurozone countries, like Spain and Portugal, led the retreat. Royal Bank of Scotland, more than 80pc owned by the UK taxpayer, fell 1.93p, or 4.6%, to 39.84p.
Part-nationalised Lloyds Banking Group lost 2.79p to 63.93p. Confidence in the 'black horse' lender was aggravated by Clare Spottiswoode, a member of the Independent Commission on Banking, suggesting that Lloyds should be broken up or forced to dispose of its HBOS unit.
It forced one frustrated broker and shareholder to ask: 'Really, what does a former gas industry regulator know about the banking industry?'
TUI Travel, Europe's largest travel company, resisted the malaise, rising 7.2p to 208.1p. Buyers responded to a report that its parent TUI is in talks with investor John Fredriksen over its shareholding in shipyard firm Hapag-Lloyd. It prompted speculation TUI could use cash from the sale of its stake to help fund further buying of TUI Travel shares.
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Contract catering giant Compass was boosted 10p to 539p in anticipation of a pleasing set of annual results tomorrow.
B&Q retailer Kingfisher added 4.50p at 249.20p on buying ahead of the third-quarter figures on December 2nd.
The stock has rallied 20% over the last three months and broker Singer Capital Markets says it is the large cap stock which most deserves the recent recovery.
Housebuilder Taylor Wimpey firmed 0.8p to 25.30p after announcing it has secured a £100m loan facility and will be looking to raise £250m via the issue of sterling denominated fixed rate notes.
An Investec recommendation and target price of 591p lifted discount airline easyJet 5.50p to 445.3p.
RM, a supplier of educational software, rose 5.50p to 155.25p after announcing a third successive year of record sales and profits. Management shrugged off fears of Government budget cuts and reported a 10% increase in full year sales to £380.1m, and a 12% rise in operating profits to £19.9m. Shareholders receive an 8pc dividend increase.
Beowulf Mining added 1.25p at 25.75p after the Swedish-focused exploration company raised its estimate for the Kallak iron ore deposit to more than 175m tonnes.
Speculative buying lifted oil and gas minnow Bahamas Petroleum 1.3p to 110p. Mariana Resources edged up a penny to 42.75p following a positive drill result from its flagship Las Calandrias gold project in the newly emerging Deseado Massiff gold district in Santa Cruz, southern Argentina.
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