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Troubled times ahead for British Land, down 4.8p at 467.6p, after main board director and head of retail Andrew Jones and two of his top executives left as exclusively revealed in last week's Evening Standard.
That is according to top broker Cazenove which has subsequently downgraded its recommendation on the property giant's shares from in-line to underperform. The broker says the departure of Jones, along with Valentine Beresford and Mark Stirling, came as no surprise but has highlighted a gap in the management at British Land.
Two uncertainties now hang over the shares. First, Cazenove questions when BL will begin to make the acquisitions that are required to offset the significant loss of income from its sales programme, including the recent disposal of a 50% interest in the City's Broadgate development.
“We are perplexed as to why the group's £2 billion debt facility has not been used given that we believe BL was one of a small number of financially capable investors at the time of the market's nadir in the summer,” the broker says.
It all also questions the strength of the group's remaining management team. BL's portfolio consists of 65% retail property which had been expected to expand under Jones, who had been tipped to take over the role of group chief executive from former banker Stephen Hester. But that move was scuppered when BL appointed Chris Gregg from Goldman Sachs.
Shares generally bounced back from yesterday's sell-off with the FTSE 100 Index rising 67.744 to 5221.59.
Once again the charge was led by the miners who are still hoping to benefit from rising raw material prices. Citigroup also had some positive words on the sector, while Morgan Stanley was again pushing Vedanta Resources, up 86p at 2304p, and Kazakhmys, 48p better at 1227p, as its top picks in the mining sector. The broker says that with Vedanta's stock trading at its current capacity value, the market prices in almost “no value” for growth and cost reductions.
It confirmed that growth plans over the next couple of years and further operational improvements could lead the share price to more than double without material changes to spot commodity prices. Kazakhmys is one of the cheapest stocks in the sector and can be used as a leveraged play on copper.
New York investors had to endure a difficult trading session on Wall Street overnight which saw share prices trade erratically. The Dow Jones finished 14.74 down at 9871.06 with investors cautious about third-quarter prospects.
Tensions grew early on after the respected banking analyst Meredith Whitney downgraded shares of Goldman Sachs ahead of third-quarter results tomorrow. This seemed to rattle the whole sector with Goldman losing 2% to $186.39, JP Morgan, down 1.7% at $45.28 ahead of results later today, and Bank of America 1.3% lower at $17.80.
Healthcare group Johnson & Johnson fell 2.6% to $60.89; although it posted a 1% increase in profits which was above market expectations, it missed its revenue growth forecast.
It was a day of contrast for investors in Asia this morning. In Tokyo, small losses were the order of the day as the Nikkei 225 slipped 16.35 to 10,060.21. Microchip makers, such as Tokyo Electron, were sent reeling by news that the world's biggest chipmaker Intel Holdings in the US had trimmed capital spending plans despite an upbeat earnings result. Its quarterly outlook and results beat expectations, but it said it now expects its capital spending in 2009 to be around $4.5 billion (£2.8 billion) rather than $4.7 billion.
Bank shares such as Mizuho Financial Group also slid after their US peers fell ahead of earnings reports.
But over in Hong Kong shares extended recent gains with the Hang Seng ending the morning session 365.95 higher at 21,833.31.
