B&Q group Kingfisher is falling sharply again on worries about a cut in its forthcoming dividend.
On Friday its shares dropped 9.5p to 173.6p after house broker UBS reduced its dividend forecast and warned there was a chance B&Q's recovery could be delayed.
Today JP Morgan joined in, predicting a 40% fall in the full-year payout to shareholders, saving £100m a year. It cut its price target from 256p to 235p, mainly due to reduced expectations for property sales. The news prompted another fall in the company's share price from 8.5p to 165.1p.
But JP Morgan was not entirely negative. It sees the possible dividend cut as part of a move to cash in some of Kingfisher's non-core assets. It said: "The listing of a stake in B&Q China and sale of [its 21% stake in Germany's] Hornbach becoming a consideration. We also believe that property sale and leasebacks in France and Italy are also more likely."
JP Morgan also cut its price target for DSG International, the business formerly known as Dixons, from 150p to 130p. "We still feel that it is too early for the market to speculate on what impact [new chief executive] John Browett might have to improve strategy and execution and what impact that would have on profitability," said the bank. DSG slipped 3.3p to 109.8p.
Elsewhere, three month Libor jumped from 6.39875% to 6.4475%, the highest level since 19 September. This has done little to help Northern Rock, now down 16.2%, or indeed the whole market. The FTSE 100 is 59.7 points lower at 6231.5.
Among the other banks hit are Royal Bank of Scotland, down 15.25p to 411.25p, and Barclays, off 13p to 496p. Alliance & Leicester has recovered slightly, as the market perhaps starts to believe the bank's denials of any problems. It is now down 2.3%.
