Thuesday’s Master Investor Market Report featuring Morrisons, Telecity, BT and Proton Power Systems

• The Greek Finance Minister Yanis Varoufakis has said that he expects a bailout agreement to be reached in the coming days or weeks during a speech in Brussels. Mr Varoufakis said the country needs a bad bank to unclog the financial system and a development bank funded by the proceeds of privatisation. The European Central Bank agreed to provide an additional £2 billion in emergency liquidity last night, ahead of the next payment of £800 million due to the IMF next Tuesday.
• The UK markets hit their lowest level in a month today as the least predictable election in some time took place. Firms in a number of sectors have been raising concerns for a number of months about the uncertainties raised by polls. Sterling fell to 1.5231 against the dollar.
• The FTSE 100 fell by 36.05 points to 6,897.69 points;the FTSE 250 rose by 50.62 points to 17,462.70; the FTSE All Share fell by 14.71 points to 3,731.79 points; and the FTSE AIM All Share finished the day down by 3.26 points at 748.31 points.

Like-for-like sales slowed during the 3 months ended 3rd May at Morrisons (MRW), dropping by 2.9% for the period and disappointing after some positive momentum was seen in the prior quarter. Transaction numbers dropped by 3.2% despite basket sizes remaining roughly equal, suggesting that Morrisons is struggling against its competitors in the current supermarket price wars. However, Augustin Eden from Accendo Markets believes that price is not the key factor at this point and that the firm will have to update its strategies and improve its digital offerings. The shares fell by 12.4p to 176.9p.

Data centre operator Telecity (TCY) has received a takeover approach from US-listed rival Equinix, who are offering a consideration of 1,145p per share payable in cash and stock, representing a 27% premium over yesterday’s closing price and valuing Telecity at £2.3 billion. The company will enter into discussions and further announcements will be made in due course. Telecity said that its first quarter performance was on track and management reiterated guidance of 8-10% annual organic revenue growth. The shares grew by 191.5p to 1,091p.

Telecommunications outfit BT (BT.A) recorded a 2% drop in revenues for the year ended 31st March, beating analyst forecasts after it performed more strongly than expected in its final quarter. Profits before taxation rose by 14% to £2.6 billion and normalised cash flows rose to £2.8 billion pounds, a development that was heralded by Societe Generale and Nomura as a significant indicator for future performance. Shares in BT fell by 1.05p to 453.25p.

Hydrogen fuel cell manufacturer Proton Power Systems (PPS) made a pre-tax loss of 10.1 million pounds in the year ended 31st December as it increased administrative spending to £3 million, prepared for a number of new projects and brought a range of new products close to market. Management expect worldwide sales to pick up in 2015 and believe the company occupies a strong market position. The shares closed at 3.62p, up by 0.25p.

Friday’s news today

Numis (NUM), BG Group (BG.) and InterContinental Hotels (IHG) will publish results tomorrow.

Balance of trade figures for the UK will be posted, as will German trade and inflation figures.

Quote of the day

“The best argument against democracy is a five minute conversation with the average voter.”
― Winston Churchill