The property developer raised about £49m from the market.
While jitters over the Italian election result dragged the wider market lower, property developer St Modwen still managed to stand out as a faller after turning to shareholders to help pay for the development of London’s New Covent Garden Market.
JPMorgan Cazenove and Numis placed roughly 20m shares, or 10pc of St Modwen’s issued share capital, at 245p apiece to raise about £49m, a deal that pushed the company’s shares down 29.2, or 10.5pc, to 248.6p. The Covent Garden development is a joint venture with partner Vinci (Other OTC: VCISF - news) and will cost between £150m to £200m, of which St Modwen will shoulder half.
Although the placing was completed successfully, the shares were issued at a lower price than some in the market had anticipated. Indeed, at an 11.8pc discount to Monday’s close, the shares were cheaper than the 5pc discount initially assumed by Jon Stewart, an analyst at Espirito Santo.
“They’re unlucky to do it on the same day as Italian worries have kicked-off,” Mr Stewart said. “The market wasn’t really in a positive mood.”
Nevertheless, Bill Oliver, St Modwen’s chief executive, said the 245p issue price was “ahead of our original expectations”.
“The equity markets are open, the institutions are receptive to equity-raisings and we’ve had a very strong run in our share price,” Mr Oliver said. The stock went to existing shareholders, including Morgan Stanley and Aberforth, as well as new institutions, he added.
Overall, the uncertainty arising from Italy’s election described as the “pivotal political event for the eurozone this year” by analysts at Citigroup (NYSE: C - news) predictably saw shares take a tumble across the board.
The FTSE 100 lost 84.93 points, or 1.3pc, 6,270.44 and the mid-cap FTSE 250 shed 149.66 - 1.1pc - to 13,536.04, with stock markets in continental Europe all moving sharply lower. Wall Street had a chance to react to the Italian vote after trading in London closed on Monday evening, and the Dow Jones Industrial Average closed 1.6pc lower later that night. Today, US markets rebounded on the back of encouraging housing data.
Fund managers and banks, perceived as being exposed to Europe’s debt woes through sovereign bond markets, were among the heaviest individual fallers on London’s benchmark index.
Barclays (LSE: BARC.L - news) dropped 14.65, or 4.7pc, to 297p, Royal Bank of Scotland (LSE: RBS.L - news) slid 15.3 to 339½p, Schroders (LSE: SDR.L - news) declined 64p to £19.80 and Aberdeen Asset Management fell 10.8 to 424.7p.
Lloyds Banking Group (LSE: LLOY.L - news) cheapened 1.79 to 53.14p, with strategists at Societe Generale (Paris: FR0000130809 - news) striking the shares from their so-called “premium list” ahead of the lender’s full-year results on Friday. SocGen’s experts cited the recent strong run in the bank’s shares as the reason for the move.
RBS unveils its own figures for 2012 on Thursday, and Investec (LSE: INVP.L - news) analyst Ian Gordon said he remained a seller of the shares, despite the lift they received earlier in the week following press reports the lender will sell a stake in Citizens (NYSE: CIA - news) , its US retail business. Instead, Mr Gordon preferred to focus on ominous fresh mortgage numbers.
“The BBA’s January data for mortgage approvals was awful the second worst month in a decade, and the worst since January 2011,” he said, adding that there was “little encouragement here for UK-focused RBS, or Lloyds”, the latter a share he also rates a “sell”.
After disappointing the market with its fourth quarter trading update, Whitbread , owner of Costa Coffee and Premier Inn, closed down 94p at £24.69. Like-for-like sales slowed to 2.7pc in the 11 weeks to February 14, compared with 3.3pc in the third quarter.
In fact, amid the Italy-induced gloom, only 14 companies on the main board managed to finish the day higher. Among them were precious metals miners Randgold Resources , 140p better at £56.15, and Fresnillo , up 12p at £15.15, which both benefited from gold’s status as a safe-haven.
Car parts manufacturer GKN (LSE: GKN.L - news) booked the biggest blue-chip gain in the wake of the group’s 2012 results, with the company’s pre-tax profits coming in ahead of expectations. The shares advanced 9 to 261.3p.
Similarly, earnings gave a lift to chemicals group Croda International (LSE: CRDA.L - news) , up 28p at £25.84 after reporting a 6.6pc increase in profit before tax to £253.2m. On the mid-cap index, fellow chemicals business Elementis released its own numbers for last year and climbed 13.9, or 6.1pc, to 241.7p.
“Elementis (LSE: ELM.L - news) has one of the most attractive geographic footprints in the sector,” said analysts at N+1 Singer, who noted that just under 30pc of the company’s earnings come from Europe, less than its peers, and 40pc is generated in North America.
“Combined with the potential for acquisitive growth and organic growth from targeted investments in new capacity, we believe that the group is well positioned to continue to deliver strong growth over the medium term.”
“The healing in the structured credit market since the summer of 2012 has been dramatic,” the BAML experts said, noting that cost of buy-to-let securitisation is continuing to come down. They boosted their earnings-per-share estimate for 2013 by 6pc and lifted their 2014 forecast by 11pc.
Towards the other end of the mid-tier index, retailer Sports Direct was hurt by news founder Mike Ashley had lowered his stake in the group to approximately 64pc from 68.6pc, through the sale of 25m shares at 400p. Sports Direct slid 21½ to 409p as a result.