23 January 2018
visit www.ebaday.com

Reuters shares slide on Instinet fears

15 March 2002  |  3207 views  |  0 Reuters shares slide on Instinet fears

Reuters share price has continued to take a pounding as analysts assess the fall-out from the recent round of price cuts at electronic trading subsidiary Instinet, which is facing increased competition from rivals for Nasdaq marketshare.

Shares in Reuters have continued their slide this morning, following a brief recovery from yesterday's two-and-a-half year low of £4.94. By mid-morning, the shares stood at £5.05 after rallying to £5.24 in early trading. The stock is a long way off its year high of £10.94.

Reuters' shares dipped below the £5 mark yesterday as investment banks cut their earnings forecast for the company on the back of lower estimates for the Instinet electronic broking unit.

Merrill Lynch cut its 2002 profit forecasts for the group by 14% to £397 million, well below the previous prevailing market consensus of £500 million. ABN Amro and HSBC also revised their earnings estimates downwards. ABN Amro analysts forecast a reduced profit contribution from Instinet of £120 million.

The downgrades follow Instinet's announcement on Tuesday that it would cut rates paid by broker-dealers trading Nasdaq stock by as much as 60%, in an effort to regain market share lost to Island ECN. Recent price cuts at Island have allowed it to overtake Instinet in percentage of Nasdaq trading. The merger of rivals Archipelago and RediBook has also added to the pressure on Instinet.

Last month, Reuters posted a 34 percent fall in 2001 pre-tax profit to £304 million and warned of further pressures on its subcription-based business lines.

Comments: (0)

Comment on this story (membership required)

Finextra news in your inbox

For Finextra's free daily newsletter, breaking news flashes and weekly jobs board: sign up now

Related stories

Reuters and Capco launch reference data management tool

Reuters and Capco launch reference data management tool

25 February 2002  |  3609 views  |  0 comments
Island signs OCC for futures clearing

Island signs OCC for futures clearing

21 February 2002  |  2630 views  |  0 comments
Reuters names Stephen Wilson to head up equity alliances

Reuters names Stephen Wilson to head up equity alliances

20 February 2002  |  3415 views  |  0 comments
Instinet invests in StarMine

Instinet invests in StarMine

13 February 2002  |  2849 views  |  0 comments
Reuters hit by market slump

Reuters hit by market slump

12 February 2002  |  3018 views  |  0 comments
Reuters names Christopher Masters as treasury marketing director

Reuters names Christopher Masters as treasury marketing director

05 February 2002  |  3256 views  |  0 comments
Reuters enters European energy market

Reuters enters European energy market

04 February 2002  |  2694 views  |  0 comments
Reuters recruits Tony Kirby to head STP offensive

Reuters recruits Tony Kirby to head STP offensive

23 January 2002  |  3694 views  |  0 comments
SecFinex names Instinet exec John Oddie as CEO

SecFinex names Instinet exec John Oddie as CEO

21 January 2002  |  2761 views  |  0 comments

Related company news

 

Related blogs

Create a blog about this story (membership required)
visit www.capgemini.comvisit www.thomsonreuters.infovisit www.fivedegrees.nl

Top topics

Most viewed Most shared
Banks shift priorities toward growth, digitisation and innovation - surveyBanks shift priorities toward growth, digi...
9317 views comments | 37 tweets | 48 linkedin
Standard Chartered establishes fintech innovation and investment unitStandard Chartered establishes fintech inn...
9165 views comments | 14 tweets | 14 linkedin
BofA leads on blockchain patentsBofA leads on blockchain patents
8948 views comments | 12 tweets | 12 linkedin
Sbanken opens developer portal and invites customers to build their own digital bankSbanken opens developer portal and invites...
8272 views comments | 17 tweets | 11 linkedin
Metro Bank joins digital revolution with instant online account openingMetro Bank joins digital revolution with i...
6910 views comments | 13 tweets | 25 linkedin

Featured job

Competitive
New York, NY - USA (some flexibility on location)

Find your next job