Reuters crashes below 100 pence a share level; knocks Thomson off GKM

Reuters crashes below 100 pence a share level; knocks Thomson off GKM

Reuters has crashed below the psychologically important 100 pence a share barrier, hitting prices last seen in the mid-1980s as investors pile out of the stock amid worries over its forthcoming dividend.

By early 15.00 BST, Reuters' shares stood at 98 pence, up slightly from a mid-morning low of 96 pence, but still nearly ten per cent down on the previous night's close of 108 pence. The last time Reuters' shares stood below 96 pence was in February 1986, just as the mid-eighties bull run was gathering pace.

The latest drops reflect nervous investor sentiment about the firm's outlook amid stiff competition from Bloomberg at the top-end of the market and Thomson Financial for mid-tier business.

Rumours of more lay-offs at City investment banks have compounded fears that Reuters may be unable to maintain its dividend, due April 24. From Wednesday, buyers of the stock become ineligible for payment.

The fall-off in investor sentiment comes as Reuters announces a deal to install Reuters Plus on the desktops of 120 financial professionals throughout the national branches of Gerard Klauer Mattison (GKM), an equity research and investment banking firm that serves the institutional marketplace. This represents new positions for Reuters information products at GKM, replacing Thomson.

It follows last week's announcement at Fahnestock where Reuters displaced 1000 Thomson ILX workstations at recently acquired Oppenheim.

GKM is also using Reuters Triad for indications of interest and Reuters IOE (Institutional Order Entry) network.

Phil Lynch, chief executive, Reuters America describes the deal as "further validation of the strength of our equity offerings in the American market".

GKM is the fifth competitive win for Reuters Plus in the North American market in 2003, he says, and follows more than 23,000 positions secured as a result of competitive wins and renewals for Reuters Plus in the past year.

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