MARKET REPORT: Melrose shares fall after double downgrade

Nearly £500m wiped off Melrose’s value after double writedown.

It fell 7.1 percent, or 36.3 pence, to 474.7 pence, reducing its value by 471 million pounds.

While most analysts see the stock as worth buying, UBS broke ranks by recommending its clients sell shares in aerospace business owner GKN.

The bank said one of the FTSE 100 group’s biggest earners was overvalued.

The portfolio of revenue and risk-sharing partnerships, which provides parts such as fan blades for engines and then takes a cut of the profits once they are sold, is believed to be worth £2.8bn.

But that is less than half the £5.7bn valuation Melrose quoted. As a result, UBS downgraded its rating from “buy” to “sell” and cut its target price from 770p to 400p. Melrose bought GKN, which made the cannonballs used in the Battle of Waterloo and the Spitfires for the Battle of Britain, for £8bn in a controversial deal in 2018.

It kept the aerospace division, but last year spun off GKN’s automotive, hydrogen and powder metallurgy businesses into a standalone company called Dowlais.

London’s major markets ended the week in positive territory, with the FTSE 100 up 0.5 percent, or 39.78 points, at 8,327.78 and the FTSE 250 up 0.4 percent, or 84.78 points, at 21,189.48.

Across the Atlantic, Wall Street rallied after US Federal Reserve Chairman Jerome Powell said “the time has come” to cut interest rates.

BP has invested in a division of a Chinese company that makes sustainable aviation fuel.

The oil major bought a 15 percent stake in a business owned by Zhejiang Jiaao Enprotech for about £37 million, and rose 0.7 percent, or 3.1 pence, to 429.3 pence.

Evoke, owner of 888 and William Hill gaming venues, has acquired the operator of the Winner business in Romania.

The firm will merge its division there with New Gambling Solutions into a group to be led by Winner CEO Nicklas Zajdel.

Romania will be its fifth largest market, along with the UK, Italy, Spain and Denmark. Shares rose 0.2 percent, or 0.15 pence, to 69.2 pence.

Hays gave back gains from Thursday and fell 2.2 percent, or 2.15 pence, to 95.25 pence, after the recruiter outlined further cost-cutting measures to combat continued pressures in the recruitment market.

Molten Ventures rose 3.7 percent, or 15 pence, to 422 pence just days after announcing that the value of its stake in Revolut had more than doubled to £160 million, with the banking app now worth £35 billion.

ADF, which rents costume and make-up trailers to the UK film and TV industry, has raised £10m by placing 20m shares at 50p each.

The company, which rose 4.9 percent, or 2.5 pence, to 53.5 pence, warned it was still hurt by the impact of the Hollywood strikes earlier this year.

Accesso Technology launched a £4m share buyback just a week after the ticketing software provider warned that slow activity over the summer and delays to projects in the Middle East will hit revenue. The shares rose 3 per cent, or 16p, to 560p.