FTSE 100 movers: Old Mutual hit by rand and rating downgrade, Debt plan drives Glencore up

The FTSE 100 remained in negative territory on Thursday, sitting down 34.53 points (0.56%) on 6,092.15 by mid-afternoon.

Old Mutual, which generates a large chunk of its profits from South Africa, sank as a broker downgrade and weaker rand weighed on the stock. The rand fell near its lowest level against the dollar since 1971 after South Africa's president unexpectedly sacked finance minister Nhlanhla Nene. RBC Capital Markets also downgraded its stance on the stock to ‘underperform’ from ‘sector perform’ and cut the price target to 180p from 200p. It said dual-listed Old Mutual is a complex group with significant currency exposure and the bank has concerns around investors’ attitude to the Solvency II coverage ratio, which it expects will be towards the lower end of the peer group.

Despite posting a 25% jump in first half pre-tax profit on flat revenue, Sports Direct International dropped after it was the focus of an article in The Guardian that some of its temporary workers were getting paid less than the minimum wage. An investigation by the paper revealed that many of the company’s warehouse staff were being paid an effective rate of about £6.50 an hour against the statutory rate of £6.70, which could be saving the firm millions of pounds a year at the expense of some of its workers.

Glencore was the biggest riser after it appeased the market with news it has increased its planned target of reducing debt and preserving capital to the tune of $13bn (£8.6bn). It follows the mining company’s debt reduction initiatives announced in September, which included a target of $10.2bn. In a trading update, it said it has already locked in $8.7bn of its target. It is also planning to bring net debt down to between $18bn and $19bn, with the previous target being in the low $20bns, as well as cutting capital expenditure to $5.7bn this year and $3.8bn next year, down from $6bn and $5bn respectively.

TUI Group was flying high, posting sizeable growth in its annual report despite a turbulent year for the industry. The travel conglomerate posted an 8% increase in underlying turnover in the year to 30 September, to €20.012bn (£14.487bn). Its EBITDA was up 23% to €1.07bn, and earnings before tax soared 37% above the restated 2014 figures, to €885m. It was the first annual results since the group merged its British operation TUI Travel, which included the Thomson division, into German parent TUI AG.

Investors also took to Centrica’s news that full year earnings would be in-line with forecasts in a pre-close statement at the end of a what the British Gas owner admitted was a difficult year. British Gas' residential energy supply margins will be squeezed in the second half by the second 5% tariff cut, which left account volumes largely unchanged since the half-year, will remain "within the range of recent years". British Gas business will report a small loss, while US-based Direct Energy will deliver "material operating profit growth". The upstream exploration and production arm is now expected to have produced more than 75m barrels of oil and gas, higher than previous guidance.

FTSE 100 - Risers

Glencore (GLEN) 91.75p 10.44%
TUI AG Reg Shs (DI) (TUI) 1,171.00p 4.46%
Centrica (CNA) 212.50p 3.11%
Lloyds Banking Group (LLOY) 72.05p 1.95%
InterContinental Hotels Group (IHG) 2,537.00p 1.93%
easyJet (EZJ) 1,712.00p 1.60%
Fresnillo (FRES) 673.00p 1.58%
Capita (CPI) 1,186.00p 0.68%
BT Group (BT.A) 470.30p 0.66%
Royal Bank of Scotland Group (RBS) 292.10p 0.62%

FTSE 100 - Fallers

Old Mutual (OML) 170.30p -12.85%
Sports Direct International (SPD) 598.50p -10.07%
Smiths Group (SMIN) 955.00p -3.19%
Next (NXT) 7,520.00p -2.72%
BHP Billiton (BLT) 732.50p -2.26%
Johnson Matthey (JMAT) 2,602.00p -2.25%
Mondi (MNDI) 1,315.00p -2.16%
Aberdeen Asset Management (ADN) 291.90p -2.11%
Dixons Carphone (DC.) 476.00p -2.10%
3i Group (III) 477.50p -1.99%