MARKET REPORT: Jet2 shares take off after Thomas Cook collapse

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MARKET REPORT: Jet2 shares take off after Thomas Cook collapse boosts demand for its flights and packaged holidays

It has been just 19 days since Thomas Cook dramatically collapsed, with the airline’s demise costing thousands of jobs and leaving travellers around the world stranded.

This might be a problem if you had a holiday booking.

But for the company’s rivals it is a prize opportunity to hoover up extra business.

Jet2 owner Dart Group wasted no time in crowing to investors yesterday, saying the chaos had spurred ‘increased levels of customer demand’ for flights and packaged holidays.

Jet2 owner Dart Group wasted no time in crowing to investors yesterday, saying Thomas Cook’s collapse had spurred ‘increased levels of customer demand’

The firm also reported ‘encouraging levels’ of late-season bookings, prompting it to predict its profits would be higher than expected. 

It put wind beneath the wings of Dart Group’s shares, helping to lift them 16.5 per cent, or 154.5p, to 1090p.

However, the company also cautioned that sterling, which has been weak in recent months against the dollar amid Brexit concerns, could still dent its earnings. 

That concern may have lessened as of yesterday, however, thanks to Boris Johnson’s last-minute Brexit breakthrough.

Dare investors hope? Analysts were unusually upbeat, with JP Morgan declaring ‘this changes everything’ following the Prime Minister’s promising talks with Irish premier Leo Varadkar.

Stock Watch – GYG 

Shares in superyacht painting and maintenance firm GYG surged after a big investor increased its stake.

The company’s share price rose by 8.3 per cent, or 4p, to 52.5p yesterday after Lombard Odier ramped up its holding to 22.6 per cent.

In a stroke, it made the Swiss-based private bank GYG’s biggest shareholder.

Lombard’s move came two weeks after GYG sailed into the black in its latest first-half results, recording a slight profit of around £90,000.

And with reports that British and EU negotiators will now enter ‘the tunnel’ – intense talks to hammer out an accord – Morgan Stanley went so far as to say the chances of a deal are more than 50 per cent.

The cheer swept through the stock market, lifting shares in retailers, housebuilders and other firms that have fortunes tied largely to the highs and lows of the economy. 

It sent the international-focused FTSE 100 up 0.8 per cent, or 60.72 points to 7247.08, but the FTSE 250 index of mid-sized companies proved to be the star, surging 4.2 per cent, or 805.99 points, to 20,041.71, its highest level in three weeks.

Unfortunately for some, however, it wasn’t just the UK heading for the exit. Fund managers Jupiter Fund Management and Man Group revealed investors pulled more than £2billion out in the three months to September, sending shares in the firms tumbling.

Jupiter fell 5.4 per cent, or 17.2p, to 335.2p after reporting net outflows of £1.3billion. 

The exodus came after one of its star stock pickers, Alexander Darwall, announced he was leaving to set up his own outfit.

And Man Group also admitted investors had pulled about £870million, with shares falling 2.6 per cent, or 4.2p, to 157.95p after its trading update.

Gloom also struck advertising giant WPP. Shares in the firm, which is in the middle of a turnaround, were dragged down after French rival Publicis issued its second profit warning, triggering fears about the wider industry. 

Analysts suggested some of the problems were actually specific to Publicis but the warning still triggered a sell-off of WPP’s shares, causing them to fall 3.4 per cent, or 32.8p, to 931p.

Investors seemed less miffed by an update from Peppa Pig owner Entertainment One, however, despite the media company admitting its first quarter losses had widened from £6.8million to £43.9million.

In an update on the three months to June, the firm blamed rising debts, its takeover of Audio Network and lower sales in its film, television and music division.

The embarrassing performance comes less than a week before game maker Hasbro puts its £3.3billion takeover of the company to a shareholder vote. Shares remained static at 562.5p.

Having endured a brutal month after it pulled a £394.8million bond sale in September, potash miner Sirius Minerals’ shares rallied 5.8 per cent, or 0.2p to 3.63p after it sealed a supply and distribution deal with state-owned Qatari firm, Muntajat.

 

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