A Guide to Look at The UK Mid-Cap Shares Amid Jolted Sentiments

Global Financial Markets and all major share indices have been on the meltdown after the coronavirus outbreak, every passing day, the share markets across the world are setting new low point. UK share markets and indices have also been on a falling spree, especially as the news of the number of cases in Europe, and the UK per se, are increasing. At the time of writing, 383 people in the United Kingdom have been confirmed to be affected by the epidemic, while around 6 deaths have been confirmed in the country. The outbreak, along with other geopolitical tensions like the one with the OPEC countries and Russia, has also led to the spiralling down of oil prices. This sudden downfall in oil prices has further troubled the financial markets.

The UK Mid Cap space, has suffered a similar fate, as the oil and gas shares such as Cairn Energy Limited displayed a single-day decline of approximately 16 per cent on 10^th March, while, Energean Oil and Gas Plc shares were down by almost 8 per cent on a single day.

The FTSE 250 index of the London Stock Exchange is a good indicator of the UK Mid Cap shares. Let us delve into the two most important criteria that will help the investors in understanding if or not; the UK Mid Cap space is worth looking at.

FTSE 250 Performance

(Source: Thomson Reuters) Daily Chart as on 10-March-20, after the closing of the LSE Market

The FTSE 250 Index of the London Stock Exchange is an indicator of the mid-cap shares in the United Kingdom, as the index tracks the shares that lie between the 101^st and the 350^th shares in terms of the market capitalisation. On Tuesday, 10^th March 2020, the FTSE 250 closed at a value of 17,547.05 points, a decline of 10.85 per cent or 2135.60 points, as compared to the value of the index at the beginning of the month of March at 19682.65 points. This was the 52-week low value for the FTSE 250 index, as the coronavirus outbreak, which has caused a severe meltdown of the global financial markets, deeply impacted the trading at the index. In the last one month, since 10^th February 2020, when the index traded at a value of 21,566.67 points, it has dropped 1.64 per cent or 4019.62 points, which is one of the biggest month on month decline since the global financial and mortgages crisis in 2008. The last 20 day simple moving average of the index was reported to be at 20,386.11 points, but the index has been trading way below the simple moving average, especially in the last 15 days, since the number of coronavirus cases in the United Kingdom and Europe has risen significantly.

FTSE 250 Dividend Yield

Daily Chart as on 10-March-20, after the closing of the LSE Market (Source: Thomson Reuters)

Dividend Yield plays a crucial role in determining, whether or not a share will lead to additional earnings apart from the capital gains it produces. Over the past few weeks, the FTSE 250 index has come crashing down, which has led the investors losing out on all the capital gains previously made. In these turbulent times, shares that have the prospects to pay higher dividends become extremely important to the investors. On the whole, the members of the FTSE 250 Index have reported an average dividend yield of 3.78 per cent. This dividend yield is the highest that the index has produced in the last one year, which points to the fact that companies are paying higher dividends, even if their operating and financial performances are not going as per the plan. The dividend yield of the FTSE 250 Index is the highest amongst all UK indices, which basically points out to the fact that the mid-cap shares in the United Kingdom are providing the best security in terms of additional income. And hence, despite the jolted mood of investors due to the crash of the markets, the UK Mid Cap shares could be at a decent stage of achieving some growth with lesser relative risk in the market.

Here the overview of the share price performance of two key FTSE 250 shares have been discussed, which are potentially residing in their support region as well as are dependent on the global oil prices and could see some resistive movements in the upcoming days of market turmoil.

Cairn Energy Plc (LON:CNE) Share Price Performance

As on 11^th March 2020, at 08:30 A.M (Greenwich Mean Time), at the time of writing, the Cairn Energy Plc share was trading at a price of GBX 73.65 on the London Stock Exchange market, an increase in the value of 2.65 per cent or GBX 1.90, in comparison with the price of the share on the previous trading day, which had been reported to be at GBX 71.75. As of the time of reporting, the share of Cairn Energy Plc was reported to have been trading 2.94 per cent above the 52-week low share price, that was GBX 71.55, set by the company on March 10, 2020. By the time of writing, the share price was reported to have been trading 66.03 per cent lower than the 52-week high price of GBX 216.80, that the company achieved as on September 17, 2019. By the time of writing, the market capitalisation (M-Cap) Cairn Energy Plc has been reported to be at a value of GBP 423.00 million, with respect to the current trading price of the company’s share.

The Cairn Energy Plc share had been down by around 57.84 per cent in value, in the previous one year, since March 11, 2019, when the share was trading at a price of GBX 174.70 at the time of the close of the market. It was also reported that the company’s share had been down by around 61.68 per cent, in the last six months, in comparison with the share price of GBX 192.20 at the time of the close of the market as on September 11, 2019. Cairn Energy Plc’s share has been reported to be down by approximately 56.88 per cent, in the last one-month time from the share price of GBX 170.80 that the share set as on February 10, 2020. The beta of the share of the company was reported at a value of 2.11.

Energean Oil and Gas Plc (LON:ENOG) Share Price Performance

As on 11^th March 2020, at 08:35 A.M (Greenwich Mean Time), at the time of writing, the Energean Oil & Gas Plc share was trading at a price of GBX 411.50 on the London Stock Exchange market, an increase in the value of 1.35 per cent or GBX 5.50, in comparison with the price of the share on the previous trading day, which had been reported to be at GBX 406.00. As of the time of reporting, the share of Energean Oil & Gas Plc was reported to be trading 4.05 per cent above the 52-week low share price, that was GBX 395.50, set by the company on March 10, 2020. By the time of writing, the share price was reported to have been trading 62.32 per cent lower than the 52-week high price of GBX 1092.00, that the company achieved as on August 01, 2019. By the time of writing, the market capitalisation (M-Cap) Energean Oil & Gas Plc has been reported to be at a value of GBP 718.98 million, with respect to the current trading price of the company’s share.

The Energean Oil & Gas Plc share had been down by around 44.58 per cent in value, in the previous one year, since March 11, 2019, when the share was trading at a price of GBX 742.50 at the time of the close of the market. It was also reported that the company’s share had been down by around 58.68 per cent, in the last six months, in comparison with the share price of GBX 996.00 at the time of the close of the market as on September 11, 2019. Energean Oil & Gas Plc’s share has been reported to be down by approximately 46.63 per cent, in the last one-month time from the share price of GBX 771.00 that the share set as on February 10, 2020.

Comparative Share Price Chart of CNE and ENOG

(Source: Thomson Reuters) Daily Chart as on 11-March-20, before the closing of the LSE Market