Carillion shares were suspended from the stock exchange today. While a company collapse can fire the share price of rivals’ northwards, Balfour Beatty shares were almost -3.25% lower at 4pm. That’s because Balfour thinks it could be exposed to up to £45m from Carillion’s death spiral –specifically, joint projects spread across chunks of East Anglia and Aberdeenshire.
However Balfour’s share slip was half the rate of Carillion supplier Speedy Hire plc, down more than -6% this afternoon at 56.20p. These are just the start of knock-on effects from the Carillion disaster that will hit many more across the UK economy in the coming months. However construction players Interserve (up +2.7%) and outsourcer Serco (up +7.5%) lifted on news of Carillion’s demise.
Away from the Carillion despair, gold lifted today to a four-month high thanks to more pressure on the US dollar. The dollar spot price was hovering around at 90.43 mid-afternoon, more than -0.57% down. Gold pushed ahead, climbing +0.50% to 1,341. Meanwhile the pound was not being held back – at all –cresting the 1.38 handle to 1.3804 at 4.10pm London time, up +0.54%. But the euro was up even higher, rising more than +0.65% to 1.2265 against the dollar.
At close of day GKN shares surged +4.4% higher with WPP up +2.6%. Micro Focus Int was down almost -3% at 2213.00p.
- UK FTSE 100 7,769.14 -0.12%
- DAX 13,221.48 -0.18%
- CAC 40 5,518.07 +0.02%
- Euro Stoxx 600 398.22 +0.15%
- Dow 25,803.19 +0.89%
- S&P 500 2,786.24 +0.67%
- Nasdaq 7,261.06 +0.68%
- Nikkei 225 23,714.88 +0.26%
- Gold 1,341.80 +0.52%
- Oil WTI 64.50 +0.33%
Carillion reprisals and supplier anxiety kick off
Earlier today Prime Minister Theresa May said she did not know of any public sector services compromised by Carillion’s collapse – the company is deep in the crosshairs of many prisons, schools and hospitals.
Inevitably there will be plenty of government “lessons learnt” from the collapse of a company with zero assets that kept taking multiple public sector contracts despite multiple profit warnings. Incredibly, Carillion was still paying dividends – rising dividends too – despite a humongous debt and pension load.
The impact on smaller businesses, some without financial protection, may be profound. "Whilst we all concentrate on the employees of Carillion, we never seem to really count the fall out in the supply chain completely, and I very much regret that this is going to be quite significant," Federation of Small Businesses boss Mike Cherry told the BBC. "And of course as I say my heart goes out to all those small businesses wondering what's going to happen next."
Airbus A380 future in doubt
Is it a goodbye to the Airbus A380? Production of the mega-jumbo looks set to close down if orders don’t flow towards Airbus pretty soon. Currently Dubai Emirates is the A380’s main client but it’s touch and go whether there will be more sales interest.
But as a salve Airbus can still claim to build – and sell – more aircraft than arch rival Boeing thanks to banking 1,109 orders compared to Boeing’s 912 during 2017. The A380 has sold close to the 320 mark since being launched back in 2007.
Breaking news: Ford says it will more than double electric vehicle investment in the next five years to $11bn. Ford claims it will have more than 15 100% electric vehicles on sale by 2022.