FTSE 100 up helped by Lloyds and RBS Bank, M&S down

By Diane Ray. Published on May 19, 2009 This post currently has no comments.

The FTSE 100 is up at around 4490, helped by Lloyds and RBS bank, but the M&S share price is down after poor results.

FTSE 100 Lloyds RBS M&S

Lloyds Bank and RBS

The government, through UK Financial Investments (UKFI), which manages the public owned part of Lloyds Bank and RBS, has indicated that it could begin selling off its shares in the banks earlier than expected.

This has supported a rise in the share price of both banks today with Lloyds currently up around 4% at 102p and RBS similarly up at 43.1p.

Banks seem to be continuing their rally of recent weeks, with the Lloyds and RBS share price having risen significantly since their lows.

The sizeable debt from bad loans hasn’t simply gone away though so it will be interesting to see what now happens.

Not least, there’s still the question of Eric Daniels, chief executive at LLoyds and the mounting pressure on him over his role in the HBOS takeover, particularly now that the chairman, Sir Victor Blank, has announced he is stepping down.

Marks and Spencer (M&S)

Marks & Spencer might be celebrating 125 years but the M&S share price is currently down over 6.5% after announcing today a 40% fall in its annual profits, down £400 million.

As widely anticipated, the M&S dividend has been cut. This makes the annual dividend payout just 15p, down a third compared to the 22.5p payout last year.

The final dividend for 2008/09 will be 9.5p per share and the 2009/10 interim dividend will be 5.5p per share.

This is the first time the company has cut its dividend since 2000 which is significant.

Sir Stuart Rose, M&S Chairman, commented this has been done ‘Given an uncertain economic outlook and in order to provide a stronger foundation for moving forward.’

It seems there isn’t a prospect of an improved dividend for some time. M&S are looking to save money wherever they can - even Myleene Klass has had to take a £250,000 pay cut.

M&S said ‘Retail is a cyclical business and there is no doubt that the current market enviornment has been one of the toughest for a very longe time.’

Absolutely, and no doubt the recession is leading many to seek cheaper priced clothes and food to help their personal budgets - and will continue to do so for some time.

Doesn’t seem a good time to buy M&S shares - sell or at best hold seems to be more appropriate.

Investors should of course make their own judgements on buying or selling shares and if in doubt seek independent financial advice.

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