Intu Plunge Following Brookfield Withdrawal

Thursday, 29 November: Gains made on Wall Street last night (S&P and Down Jones +2.3% abd 2.5% respectively at Wednesday’s close) set the tone for equity markets over Thursday with the positive sentiment mirrored over much of Asia, although the Hang Seng in Hong Kong ran out of steam before the close. Here in Europe, major equities started the day in the green, where they remained over the course of the day. The positive tone for equity markets comes off the back of Fed Chair Jerome Powell’s comments on interest rates in the US last night: retreating from an October statement in which he claimed US rates were a “long way” from neutral and thus leading to speculation that he would continue to raise rates, last night he claimed rates were actually just below neutral. The comments therefore seemed to suggest he will only be raising rates in the near term, with the next rate rise set to come in December.

Metro Centre and Eldon Square owner Intu plummeted at the open, and fell further throughout the day (closing -40.55%) after the takeover proposal by the Brookfield Consortium was taken off the table. Brookfield have referenced uncertainty in the UK and potential volatility as a reason for the withdrawal, a day before the already extended UK Takeover Panel deadline. Intu have announced it is to “substantially reduce short-term dividends), instead retaining cash as they believe selling assets/properties doesn’t seem likely.

Elsewhere in the UK, funeral provider Dignity suffered following today’s announcement from the Competition and Markets Authority over funeral markets in the UK. Dignity is the UK’s only listed provider of funeral related services, and have been working with the CMA since the market study was announced in January 2018. Dignity agree that there should be more transparency on funeral cost, as well as more consumer choice. Dignity have previously implemented a new pricing policy and in October 2018, launched a “Simplicity” brand, a unique new low-cost funeral service. Shares ended the day -15.84%, an 8 month low.

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