G4S shares fall further
The furore over the G4S Olympics contract showed no signs of fading as the security firm’s shares fell another 6% today.
G4S’s shares dropped 15.6p to 239p on the day chief executive Nick Buckles was summoned to Parliament to explain his company’s failings, leaving it on-track to see more than £700 million wiped from its value since Wednesday.
The problems at G4S and further revelations in relation to the Libor-fixing scandal contributed to another lacklustre session for the London market, with the FTSE 100 Index 22.6 points lower at 5639.8.
The Dow Jones Industrial Average was slightly lower in early trading after US Federal Reserve chairman Ben Bernanke failed to give any indication that more stimulus measures were imminent at a Congress hearing.
But Germany’s Dax and France’s Cac40 were slightly higher after a successful Spanish bond auction helped ease fears about the country’s future.
Back in London, the Libor-rigging scandal continued to dog Barclays as Bank of England governor Mervyn King said the bank and its directors had failed to take on board the seriousness of regulatory concerns about how the bank was run.
He said there were “genuine and deep” concerns among regulators over governance and a loss of confidence in the bank’s bosses, most notably former chief executive Bob Diamond.
Despite this, Barclays was the biggest riser in the FTSE 100 Index with shares recovering some of their recent weakness to climb 3.2p to 160.9p. In a better session for the sector, helped by stronger than expected earnings from US giant Goldman Sachs, Lloyds Banking Group was up 0.2p at 30.1p.
Building supplies firm Wolseley was one of the biggest fallers in the top flight after it said it was exploring strategic options for the future of its business in France.
With this likely to mean a big one-off accounting charge, shares fell 68p to 2260p, a drop of 3%.
National Grid also fell for a second straight session amid fears that Ofgem’s proposal for £22bn (€28bn) of investment in the UK’s electricity and gas networks fell short of the company’s needs. Shares dipped another 3%, off 20.8p to 661.8p.
In the FTSE 250 Index, chip designer CSR surged 34% after it sold its mobile phone arm to electronics giant Samsung in a deal worth £198m (€252m).
CSR announced it will return some $285m (€232m) to shareholders, while Samsung will buy $34m (€28m) of CSR shares to strengthen their relationship. Shares rose 73.2p to 291.5p.
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