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06 March 2020

Redmayne Bentley’s Top Trades

Below, we take a look at the most frequently traded shares through Redmayne Bentley over the last couple of weeks and consider why they have been so popular.
 
IMPERIAL BRANDS (IMB)
Index: FTSE 100
Sector: Tobacco
Market Capitalisation: £15,557.06m
 
Imperial Brands has recently announced that new CEO Stefan Bomhard will start on 1st July. The tobacco maker decided to make the management change to catch up with its rivals in the e-cigarette market, as it has been underperforming in comparison. While some investor uncertainty has been removed with the announcement, the question remains what changes the new executive will introduce in terms of increasing investment into new generation products or choosing to keep paying out cash in dividends. The market has not reacted strongly to the news, as the firm is down 8.81% in the past week, which is similar to the recent trends in UK markets.
 
 
PERSIMMON (PSN)
Index: FTSE 100
Sector: Household Goods
Market Capitalisation: £8,821.48m
 
Housebuilder Persimmon has shed 8.02% since the CEO’s announcement to step down at the end of February. Customer complaints about house quality and a pay scandal, where the previous Chief Executive received £45m payments in the last two years, resulted in an independent review. The review revealed a company culture that was prioritising the purchase of as much land as possible and quick sales instead of focusing on build quality of houses. The review suggested an overhaul of culture, better homebuilding and changes to executive bonuses, which prompted the CEO to step down. However, the executive has affirmed he will remain in place until a successor is found.
 
 
BNP PARIBAS (BNP)
Index: CAC 40
Sector: Banks
Market Capitalisation: €47.64bn (£41.48bn)
 
International Bank BNP Paribas has reduced its outlook for revenue growth for 2020, despite a 28% increase in net income for the fourth-quarter. The central bank’s decision to increase the negative yield policy has meant that it costs BNP just to hold customer deposits. Additionally, research house Berenberg forecast that competition will be increasing in the banking industry, as US banks will be looking to compete harder in Europe, because of Brexit weakened EU banks. Going forward, the investment bank expects a 10% return on tangible equity in 2020, compared to 9.8% in 2019, although lower than previously targeted 10.5%. BNP Paribas is trading at 7.35 P/E and has shed 18.69% year-to-date.

 
Top Trades is published in Equity Insight, a newsletter written by our stockbrokers and investment managers.
 
Please note that investments and income arising from them can fall as well as rise in value and you may lose some or all of the amount you have invested. Past performance and forecasts are not a reliable indicator of future results or performance. Please note that this communication is for information only and does not constitute a recommendation to buy or sell the shares of the companies mentioned.
 
Redmayne Bentley’s Top Trades

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