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The Central bank of the United Kingdom in its latest initiative to combat the adversity of the pandemic infused liquidity of £200 billion and reduced the interest rates to the lowest ever level to 0.1 per cent. After hitting a new 35-year-low on 18th March 2020, the FTSE 100 index made modest gains at the opening on Wednesday (19th March 2020), though after the announcement the index gained momentum and closed higher by about 1.4 per cent at 5,152 points. Britainâs blue-chip share index, the FTSE 100 responded positively to the Bank of Englandâs decision as an emergency measure for capital infusion to boost confidence in the markets and reduce the loss of employment amid the Coronavirus crisis.
Due to panic over the handling of the coronavirus outbreak in the financial markets, the central bank reduced the interest rates to an all-time low. In addition, the bank would be buying UK government and corporate bonds for £200 billion to pump cash into the system and lower the borrowing costs. The Central bank believes that without this stimulus, the volatility in the markets was likely to persist or could have worsened further. These moves would also help the employers to put workers on part-time hours rather than completely laying them off.
Just a week ago, the Bank of England had reduced the rates to 0.25 per cent from 0.75 per cent to prevent massive job layoffs amid the escalating pandemic. According to Andrew Bailey, the Bank of England Governor, this move was required in order to calm down the markets against the backdrop of global meltdown and fears of the nation sliding into recession once again since the 2008 financial crisis, which got further exacerbated by the growing number of deaths from Covid-19 across the world. The market had been fearing complete lockdown with people fighting for essentials.
The Londonâs broader equity benchmark index FTSE 100 traded at 136.79 points or 2.65% higher at 5,288.40 points today (20th-March-2020) while writing at GMT 9:29 AM. Now we would discuss the few top-performing stocks which rallied post interest rate cut announcement. These stocks were M&G Plc, Carnival Plc, Tui AG, Auto Trader Group Plc and Ashtead Group Plc.
M&G Plc (LON:MNG)
M&G PLCÂ (LON:MNG) is a UK-based company which provides savings and investments. The company manages portfolios for both individuals and large institutional investors, such as pension funds, across the world.
On 19th March 2020 after the market close, M&G Plcâs shares were at GBX 125.90, the shares rallied around 34.4 per cent from GBX 93.65 as on 18th March 2020. Stock's 52 weeks High and Low is GBX 252.56 /GBX 86.40.
Along with an annual dividend yield of 9.47 per cent. The total M-Cap (market capitalisation) of the company while writing stood at £3,273.28 million.
Carnival Plc (LON:CCL)
Carnival Plc is a leisure travel group that operates in Europe, Asia, North America, and Australia. The company had reported the impact of COVID-19 on the first quarter 2020 net loss of around $0.23 per share for the first quarter of 2020.
On 19th March 2020 after the market close, Carnival Plcâs shares stood at GBX 737.20, the shares rallied by 18.9 per cent from GBX 620 as on 18th March 2020. Stock's 52 weeks High and Low is GBX 4,249.00 /GBX 606.40.
Along with an annual dividend yield of 21.55 per cent, the beta of the company stood at 2.04, reflecting higher volatility as compared to the benchmark index. The total M-Cap (market capitalisation) of the company while writing stood at £5.76 billion.
TUI AG (LON:TUI)
TUI AGÂ is a Germany-based integrated tourism group with a broad portfolio under the Group umbrella, ranging from tour operators and travel agencies to airlines, hotels and cruise liners.
On 19th March 2020 after the market close, Tui AG shares stood at GBX 338.10, the shares rallied by 18.8 per cent from GBX 284.60 as on 18th March 2020. Stock's 52 weeks High and Low is GBX 1,090.00 /GBX 218.00.
Along with an annual dividend yield of 13.40 per cent, the beta of the company stood at 1.57, reflecting slightly higher volatility as compared to the benchmark index. The total M-Cap (market capitalisation) of the company while writing stood at £ 2.05 billion.
Auto Trader Group Plc (LON:AUTO)
Digital automotive marketplace Auto Trader Group Plc (LON:AUTO) is engaged in the business of buying and selling used and new vehicles. The company expects an operating loss for April in the range of £6-7million, due to current market conditions.
On 19th March 2020 after the market close, Auto Trader Group Plc shares stood at GBX 427.50, the shares rallied by 15.9 per cent from GBX 369 as on 18th March 2020. Stock's 52 weeks High and Low is GBX 613.80 /GBX 308.60.
Along with an annual dividend yield of 1.64 per cent, the beta of the company stood at 0.58, reflecting lower volatility as compared to the benchmark index. The total M-Cap (market capitalisation) of the company while writing stood at £3.97 billion.
Ashtead Group Plc (LON:AHT)
Headquartered in the United Kingdom, Ashtead Group Plc (LON:AHT) rents a variety of construction and industrial equipment for a host of applications and to a wide range of customers, ranging from commercial construction to disaster management.
On 19th March 2020 after the market close, Ashtead Group Plc shares closed at GBX 1,450.00. The shares rallied by 11.5 per cent from GBX 1,300 (after the market close) on 18th March 2020. Stock's 52 weeks High and Low is GBX 2,797.00 /GBX 1,010.00.
Along with an annual dividend yield of 2.80 per cent, the beta of the company stood at 1.41, reflecting slightly higher volatility as compared to the benchmark index. The total M-Cap (market capitalisation) of the company while writing stood at £6.59 billion.
(Source: Thomson Reuters, 1-Yr Comparative chart)
FTSE 100 index (UK Benchmark Index) of the London Stock Exchange on 19 March 2020, closed at 5,152 points, up by around 1.4 per cent or 71 points as compared to the previous day.
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