Why Barclays, Melrose Industries, and Thomas Cook Should Lag the FTSE 100 Today
LONDON -- The FTSE 100 is reeling from a double-whammy today after the U.S. Federal Reserve revealed plans to wind down its quantitative easing measures later in the year and the Prudential Regulation Authority told us of a £27.1 billion capital shortfall at the U.K.'s banks. As a result, the index of the U.K.'s biggest companies is down 136 points, or 2.15%, to 6,212 by late morning.
With the FTSE crashing, which individual companies are leading it down? Here are three that are dropping.
It's hardly surprising that banking shares are hurting today, with Barclays the biggest faller -- the shares are down 3.4% by late morning. The PRA, the new body overseeing the banking industry, has identified a £3 billion shortfall at Barclays. The bank is required to maintain at least 7% of its risk-weighted assets in the form of capital resources. In an announcement this morning, Barclays told us it is confident that it will exceed this 7% Tier 1 threshold by the end of 2013.
News of a disposal sent shares in Melrose Industries sliding 4.1% this morning. The company, which specializes in acquiring and improving companies in the manufacturing business, has agreed to sell Marelli Motor for £181.4 million in cash to the Carlyle Group, with the proceeds being used for paying down debt and "internal group purposes."
Over the past 12 months, the Melrose share price has only gained about 7%, and at the moment it is down about 15% from its year-to-date high of 279 pence set in March.
Thomas Cook Group has pulled off a remarkable recovery after many thought the travel firm was heading for the wall. But today the share price dropped a bit, down 1.9% following an update on the company's latest rights issue. The two-for-five issue of 409 million new shares was announced last month, and today we heard that, by the time of yesterday's close, the company had received acceptances for approximately 96.8% of the total. The new shares should commence trading today.
But before anyone worries about today's price fall, the shares have eight-bagged over the past 12 months.
Finally, reliable dividends can more than compensate for the day-to-day ups and downs of share prices. So how about a company that's offering a 5% yield and could be set for some nice share-price appreciation, too? It's the subject of our brand-new report "The Motley Fool's Top Income Share For 2013," which you can get completely free of charge -- but it will only be available for a limited period, so click here to get your copy today.
The article Why Barclays, Melrose Industries, and Thomas Cook Should Lag the FTSE 100 Today originally appeared on Fool.com.Alan Oscroft has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
Copyright © 1995 - 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.