STOCKWATCH: UK media stocks slide as ABN Amro moves to 'underweight' on sector
LONDON (AFX) - Shares in the UK media sector were under pressure in early deals, hit hard by talk that ABN Amro has turned more cautious on the near-term outlook for the sector, dealers said.
The broker is understood to have moved its sector stance to 'underweight' from 'overweight', and trimmed its recommendations on individual stocks. It has also downgraded most of its earnings forecasts in the sector, particularly those exposed to the U.S.
ABN Amro said it expects the upcoming interim reporting season for the media stocks to be grim, with any pick-up strongly biased to the second half. It believes that corporate activity is set to tail off aggressively and internet sales will be extremely tough over the next six months.
At 8.12 am, BSkyB shares were down 32 pence at 1,088, the biggest faller in the FTSE 100 index, with Granada Media down 8-1/2 at 395.
Only Reed International bucked the weak trend, up 9 pence at 634-1/2, as ABN Amro highlighted the stock as its favoured play in the UK media sector.