MARKET REPORT: Natwest given something to cheer after year of pain

It has been a long time coming for NatWest – but some in the City are finally pointing towards signs of a turnaround following months of turmoil.

It was plunged into crisis as the de-banking scandal between Nigel Farage and Coutts, part of the NatWest group, forced Alison Rose to resign as chief executive.

And further branch closures next year have raised concerns. 

While JP Morgan said management changes and the de-banking have ‘hurt’ NatWest’s valuation, its analysts are ‘more reassured’ about the bank and its outlook.

It expects NatWest’s net interest income – the difference between what banks charge borrowers and pay to savers – to stabilise in the first half of 2024.

Positive outlook: Natwest was plunged into crisis over the summer as the de-banking scandal involving Nigel Farage forced Alison Rose to resign as chief exec

And the lender should benefit from the Government’s proposal to reduce its stake through a retail share offering.

As a result, JP Morgan raised NatWest’s rating to ‘overweight’ from ‘neutral’ and increased the target price to 280p from 230p. The shares increased 3.5 per cent, or 7p, to 207.9p.

The FTSE 100 rose 0.4 per cent, or 30.29 points, to 7453.75 while the FTSE 250 was down 1.3 per cent, or 234.11 points, to 18,233.47.

Inflation in the eurozone fell more than expected, to 2.4 per cent in November, as the latest figures fuelled hopes that interest rates could be cut.

Brent crude prices rose as Opec+, the group of oil-producing nations including Saudi Arabia and Russia, agreed on further output cuts.

Mitchells & Butlers, which is behind restaurants and bars such as Harvester, Toby Carvery and All Bar One, swung to a loss of £13million in the 12 months to the end of September, having made an £8million profit last year.

Stock Watch – Ashtead Technology 

Ashtead Technology hit a record high after the equipment lender bought a business for £53.5million.

The Aberdeen group swooped on ACE Winches, which rents tools to the offshore energy industry and does maintenance and repair works. 

It hopes its eighth acquisition in six years will expand its global presence.

And the group also expects its results for this year to be ‘comfortably ahead’ of its previous forecasts. 

Shares rose 22.9 per cent, or 111p, to 596p.

It came as the value of its properties fell and cost of doing business soared. Shares slumped 8.6 per cent, or 20.8p, to 221.6p.

It was also a hard session for Auction Technology, which plunged 23 per cent, or 145p, to 485p.

The operator of branded marketplaces that connect bidders with auction houses warned that tough economic conditions, which affected the rate of growth in second half of its financial year, are still hurting the business.

The growth outlook for Future looks bleak, according to Canaccord Genuity, as advertisers and retailers have cited weakness in the magazine publisher’s biggest revenue sector.

As a result, the broker downgraded the company behind Marie Claire, Country Life and Four Four Two, from ‘hold’ to ‘sell’. Shares slid 11.4 per cent, or 109p, to 851p.

Me Group sank 4.3 per cent, or 5.8p, to 127.8p after the passport photo booth and launderette operator warned its revenues for the year to the end of October are likely to be lower than expected.

Matt Moulding, the boss of online retailer THG, has snapped up a 3.2 per cent stake in the small and mid-cap investor Kelso, which owns holdings in his company and two other listed firms.

THG dropped 4.6 per cent, or 3.8p, to 76.18p while Kelso gained 7.3 per cent, or 0.2p, to 2.95p.

Genedrive will need to raise fresh funds next year to stay afloat as the diagnostics firm is running out of cash and hopes to win more Government grants so it can bring new products to markets. It dived 19.7 per cent, or 1.5p, to 6.13p.

Elsewhere, Carclo fell 21.5 per cent, or 2.58p, to 9.42p as the soaring demand for diagnostic equipment during the pandemic faded.

The company, which makes plastic parts for car lights and medical devices, also wants to restructure its US business to reduce costs, while higher interest rates raised a ‘material uncertainty’ over breaching its financial commitments next year.

This post first appeared on Dailymail.co.uk