MARKET REPORT: Will summer dreams mean take-off for Tui?

A little optimism can go a long way these days – particularly for hard-hit companies.

This was the case for Tui, whose shares leapt after boss Fritz Joussen told a German newspaper that he expects ‘a largely normal summer’ for the company this year.

His comments, made over the weekend, were reassuring for investors in the battered travel industry, which was among the worst-hit in 2020 when Covid chaos grounded flights for months on end and in many countries put paid even to domestic trips.

Boost: Anglo-German holiday company TUI's shares rose 4.7% yesterday afteru00A0boss Fritz Joussen said he expects 'a largely normal summer' for the company this year

Boost: Anglo-German holiday company TUI’s shares rose 4.7% yesterday after boss Fritz Joussen said he expects ‘a largely normal summer’ for the company this year

The rollout of multiple vaccines this winter comes during the quietest part of the year for travel firms – and the mass jab programmes may mean holidaymakers desperate for a beach break can book ahead for the summer.

The Anglo-German travel company will be helped by the fact that it sells holidays both in Europe and further afield – and that it does not overly rely on customers coming from any one country.

The FTSE 250-listed group crashed to a £2.9billion loss in the year to September, after the pandemic forced it to cancel thousands of trips, including 80 per cent during the lucrative summer season.

But Tui shares surged by around 9 per cent in early trading and finished the day up 4.7 per cent, or 21.4p, at 479.8p after the surge in Covid infections and new clampdowns in the UK made traders nervous and ate into some of the earlier gains. Joussen’s upbeat comments meant Tui outperformed many of its peers.

Stock Watch – Eqtec

Waste-to-energy specialist Eqtec soared after a major shareholder lent it £1.25million.

The one-year loan from Altair Group, which owns around 20 per cent of Eqtec, will be used to pay off money still owed to another firm, Riverfort Capital.

Eqtec said earlier this year it has seen an increase in the number of potential clients asking about its technology that gasifies waste such as wood chippings to make gas. 

AIM-listed Eqtec’s shares jumped 6.6 per cent, or 0.17p, to 2.76p.

British Airways-owner IAG – which has been hammered by the slump in transatlantic flights – fell 6.2 per cent, or 9.95, to 149.85p, while Easyjet slumped by 7.9 per cent, or 65.2p, to 764.8p, and plane engine maker Rolls-Royce by 7.2 per cent, or 8.05p, to 103.2p.

The wider market rose during the first day of trading in 2021 – although, like Tui, the early surges lost steam later in the day.

After climbing by as much as 3 per cent the FTSE 100 ended 1.7 per cent higher, or 111.36 points, to 6571.88, as the index’s biggest miners rose in parallel with metals prices.

The more domestically focused FTSE 250 inched 0.2 per cent higher, or 49.59 points, to 20537.89 on the prospect of more lockdowns.

Boris Johnson’s Christmas Eve Brexit deal with the EU meant there was no turbulence related to Brexit. 

The agreement covers goods rather than services – meaning there are a lot of details that still have to be hammered out, particularly where finance is concerned.

Bitcoin prices see-sawed, with the digital currency racing through the $34,000 mark at rip-roaring speed before slumping back to around $30,000. 

One bitcoin was worth around $31,175 last night. Hip replacement-maker Smith & Nephew, up 3.8 per cent, or 57p, to 1567p, completed the £175million takeover of US group Extremity Orthopaedics, which has been working on new shoulder replacement systems.

And Country Life-publisher Future also got a boost, rising 3.7 per cent, or 64p, to 1802p, after providing an update on a deal.

It said it has been given a green light by regulators to buy price comparison site Goco.

Elsewhere, high-tech defence company Qinetiq bagged a £127million contract to support the RAF’s fleet of Typhoon jet fighters.

Qinetiq – which was spun out of the Ministry of Defence and is said to have been the inspiration for Q in James Bond – will provide engineering services and will work on a radar development programme.Shares fell 0.4 per cent, or 1.2p, to 318.6p.

An upgrade to ‘neutral’ from ‘underperform’ from Exane BNP Paribas analysts was not enough to rouse Next’s stock. 

It slid 2.5 per cent, or 174p, to 6912p, as investors braced before seeing the full extent of the damage done by Covid restrictions over Christmas.

Some links in this article may be affiliate links. If you click on them we may earn a small commission. That helps us fund This Is Money, and keep it free to use. We do not write articles to promote products. We do not allow any commercial relationship to affect our editorial independence.

Leave a Reply