Fallout from Enron saga hits stocks
As the revelations surrounding Enron continue to rock the accountancy world, the Accountancy Age/ADVFN index edged down this week with the majority of stocks slipping lower in a weak economic climate
Accountancy-related shares closed last Thursday at 79.99 points, down 0.96 points from the previous week, hitting lows not seen since November.
But the benchmark FTSE-100 inched up as blue-chip companies pulled the index up last Wednesday.
The week’s top flops were Logica and ITnet, which both fell 5%. Logica fell after Merrill Lynch and Goldman Sachs upgraded competitor CMG. Both companies suffered losses last week as Vodafone awarded its multi-media messaging contract to rival Ericsson. The analysts did not mention Logica.
ITnet fell after issuing a trading statement lowering current annual sales targets. The statement was intended to reassure investors that expectations had been exceeded for 2001. Analysts and investors were frustrated after the company refused to reveal any details surrounding the statement. Jonathan Imlah of Dresdner Kleinwort said: ‘They signed some contracts in the back of the year which will fall into the period but they are recurring revenues, so I’m at a bit of a loss to explain it.’
On the up-side, shares for Mysis rose after the company said it is looking to make acquisitions. Shares dropped initially after it revealed a 13% drop in profits but rallied at the end of the week.