There’s been further appreciation seen in the pound this morning with the currency rising above the $1.33 mark to trade at its highest level since last July.
There’s little by the way of fresh developments to support this rise with the markets seemingly building on recent gains as traders bet that a no-deal Brexit will be averted.
The gains in sterling are weighing on UK stocks though, with the FTSE moving below the 7100 mark and falling to its lowest level in over a fortnight.
M&S shares slump on dividend blow; Ocado deal agreed
The biggest faller of the blue-chips today is Marks and Spencer (LON:MKS), with shares in the retailer plunging by as much as 10% after shareholders took a dim view to the financing plans behind a joint venture with rival firm Ocado (LON:OCDO).
M&S plans to tap investors to finance the £750M deal, raising the bulk of the funds through a £600M rights issue while the prior dividend is expected to be cut by almost two thirds. This means a final dividend of 7.1P per share for 2018-19, 62% lower than the 18.7p paid in the previous period. While the market has reacted angrily to the news by selling M&S stock in droves, the prospects for Ocado appear far more favourable as the firm will not only receive a large chunk of cash but they will also save an estimated £15M a year in sourcing fees that are currently paid Waitrose.
Ocado is the best performer on the FTSE and higher by just shy of 5% at the time of writing.
Metro Bank’s stock plunges after probe revealed
If it’s a bad day for M&S shareholders, it’s a disastrous one for investors in Metro Bank (LON:MTRO), with the stock plunging by a further 20% after a near 16% drop yesterday.
The bank’s market cap which peaked at £3.5B last March has now fallen to just over £1B after it announced that regulators are investigating an accounting error somewhere in the region of £900M was revealed. Metro are looking to raise £350M from investors to make up for a shortfall in the capital it holds against loans after it announced that a swathe of commercial loans had been incorrectly classified. The bad news, turned worse when it became apparent that the original stance of the bank that it has found the mistake itself was false, with the issue actually discovered by the Bank of Englands, Prudential (LON:PRU) Regulation Authority.