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Dec. 9, 2019, 8:48 a.m. EST

Tullow Oil sinks in otherwise-flat London markets as election waits begins

Pound’s rise keeps a lid on FTSE 100 gains

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By Barbara Kollmeyer, MarketWatch

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Tullow Oil shares lost more than half their value on Monday, after the oil and gas company cut guidance and its chief executive resigned, in otherwise-sluggish London markets.

The FTSE 100 index /zigman2/quotes/210598409/delayed UK:UKX 0.00%  slipped 0.2% to 7,225.56, weighed down as the British pound continued to rise. The pound /zigman2/quotes/210561263/realtime/sampled GBPUSD +0.0443%  gained 0.2% to $1.3169, as a weekend poll from the Financial Times showed a 10 percentage-point lead for the ruling Conservative Party over the Labour Party ahead of the Dec. 12 general election.

A strong pound tends to be negative for U.K.-based multinationals — many of which are listed on the FTSE 100 — that generate most of their revenue outside the country.

Tullow /zigman2/quotes/205079109/delayed UK:TLW -1.04%  shares slid 60% after the company said 2019 output fell significantly below expectations, suspended its dividend and said Chief Executive Paul McDade had resigned with immediate effect.

“The news represents a continuation of the problems which have dogged the company ever since its share price peaked more than seven years ago,” said Russ Mould, investment director at broker AJ Bell, in a note to clients.

“The appetite for risk which served it well when exploring for oil and gas arguably left it in a perilous position when it had too much debt heading into the oil-price crash in 2014. Despite efforts to reduce borrowings, this remains an issue for the company, with net debt totaling nearly $3 billion,” he added.

Leading the gainers were shares in grocer Tesco /zigman2/quotes/203761082/delayed UK:TSCO +0.50% , which confirmed speculation that it had begun a review of the strategic options for its businesses in Thailand and Malaysia, including an evaluation of a possible sale of these businesses. Shares rose nearly 5%.

Just Eat shares  rose 0.6% after Prosus, a spinoff of South African consumer internet group Naspers /zigman2/quotes/205954517/delayed ZA:NPN -2.93% , lifted its offer for the U.K. online food-delivery company to £5.1 billion pounds ($6.70 billion), stepping up a bidding fight for Just Eat with Takeaway.com /zigman2/quotes/201653805/delayed NL:TKWY -4.44% .

0.00 0.00%
Volume: 734,087
Jan. 21, 2022 4:56p
US : Tullett Prebon
+0.0006 +0.0443%
Volume: 0.0000
Jan. 23, 2022 8:42p
UK : U.K.: London
59.00 p
-0.62 -1.04%
Volume: 9.20M
Jan. 21, 2022 4:39p
P/E Ratio
Dividend Yield
Market Cap
£844.89 million
Rev. per Employee
UK : U.K.: London
288.75 p
+1.45 +0.50%
Volume: 14.13M
Jan. 21, 2022 4:35p
P/E Ratio
Dividend Yield
Market Cap
£21.94 billion
Rev. per Employee
ZA : South Africa
-7,761 -2.93%
Volume: 520,427
Jan. 21, 2022 5:05p
P/E Ratio
Dividend Yield
Market Cap
1106.39 billion
Rev. per Employee
NL : Netherlands: Euronext Amsterdam
-2.17 -4.44%
Volume: 1.75M
Jan. 21, 2022 5:36p
P/E Ratio
Dividend Yield
Market Cap
€9.93 billion
Rev. per Employee

Barbara Kollmeyer is an editor for MarketWatch in Madrid. Follow her on Twitter @bkollmeyer.

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