FTSE 100 – Turbulence For Airlines But Renewed Appetite For Just Eat And Shell Powers Ahead

FTSE 100 – Turbulence For Airlines But Renewed Appetite For Just Eat And Shell Powers Ahead

“With freedom set to be pushed back over the horizon, and a four week delay is expected to be announced to the full re-opening of the economy, aviation stocks have been hit with a burst of fresh turbulence.

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Q1 2021 hedge fund letters, conferences and more

Airline Stocks Fall

Aircraft engine manufacturer Rolls Royce and British Airways owner IAG are the biggest early fallers on the FTSE 100 today, with the expectation that continued domestic restrictions are likely to be a sign that quarantine rules will also stay in place for longer, pushing back the recovery for the airline sector. Rolls Royce fell by around 3% and IAG by 2.8%

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With the travel traffic lights unlikely to change from red and amber any time soon, that’s also pushed EasyJet down 1.8%,. Meanwhile, Wizz Air fell by 1% and Ryanair by 1.3%.

The conference organiser Informa is also on the slide today, down 2% with the delay to ‘freedom day’ seen as yet another blow for the company. The events business has been one of the biggest corporate casualties of the pandemic, and Informa, the provider of global conferences, has been no exception. It has tried to generate revenues from virtual and hybrid events, but they are far from the cash cow that major in person events provide.

Just Eat Takeaway And Shell Rise

But stay at home stock Just Eat Takeaway has seen a flurry of interest today, with its share price up around 2% amid expectations that our appetite for deliveries will continue. A dollop of interest may also have been added to the stock, due to its collaboration with former French football player Eric Cantona for its Euro 2020 ad campaign. TV audience figures for the first games so far have been strong. However, one of its tag lines ‘freedom draws near’’ may appear today to be a little premature.

Royal Dutch Shell is also gaining strongly today, up by around 2% off the back of higher oil prices and amid swirling rumours that it could be about to sell a big chunk of holdings in the US Permian basin, which accounted for 6% of its oil and gas output last year. It another sign of shifting sands at Shell as it faces increasing investor pressure to map its future as the net zero 2050 pledge looms.

BT was also one of the top risers today, with a dose of fresh momentum following the purchase of a 12.1% stake in the company, by Patrick Drahi’s Altice UK. It’s a vote of confidence in the group’s long term potential and may make it easier for BT to raise capital to support the fibre roll-out over the next few years."

Article by Susannah Streeter, senior investment and markets analyst, Hargreaves Lansdown

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Jacob Wolinsky is the founder of ValueWalk.com, a popular value investing and hedge fund focused investment website. Jacob worked as an equity analyst first at a micro-cap focused private equity firm, followed by a stint at a smid cap focused research shop. Jacob lives with his wife and four kids in Passaic NJ. - Email: jacob(at)valuewalk.com - Twitter username: JacobWolinsky - Full Disclosure: I do not purchase any equities anymore to avoid even the appearance of a conflict of interest and because at times I may receive grey areas of insider information. I have a few existing holdings from years ago, but I have sold off most of the equities and now only purchase mutual funds and some ETFs. I also own a few grams of Gold and Silver

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