Market report: Ocado at three-year low as Amazon's debut threatens

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Investors have continued to eat away at Ocado’s dwindling market value with no sign of an overseas deal to combat concerns about Amazon’s entry into the UK fresh foods market.

Shares in the grocery deliveries firm slumped to their lowest in more than three years, tumbling 18.8p, or 8.4%, to 205.5p.

Ocado’s swarm of short-sellers will be rubbing their hands with glee. 

The company, which promised to have sealed a deal with an overseas supermarkets group by the end of last year, is the second-most-shorted share on the LSE behind Carillion.

Close to a fifth of its shares are out on loan to hedge funds hoping to cash in on a share price slump which has accelerated, with over 40% wiped off since April.

Amazon’s long-awaited fresh food deliveries launch in parts of London last week quashed vague speculation of a takeover of Ocado.

More polls pointing to a possible Brexit sent the FTSE 100 reeling for a fourth day in a row as it dived 81.21 points, or 1.3%, to 5963.76.

The usual Brexit culprits, those viewed as most exposed to a vote to leave the EU, littered the bottom of the table, including housebuilder Barratt Developments, down 14p at 522.5p, and banks such as Barclays, off 5.15p at 160p.

Investors also switched out of Sky, which slid 27p to 864.5p. The fall came even as analysts at Goldman Sachs tipped the pay-TV giant as a potential takeover target given “the stickiness of the TV product and its growing pipeline of in-house content”.

Even a double upgrade from UBS wasn’t enough to prevent Centrica shares falling 1.7p to 200.2p.

The broker, which upgraded from sell to buy, said the shares were worth a punt with less pressure than expected from the competition watchdog and after its £750 million rights issue, which has shored up the balance sheet.

Market Tech, controlled by Israeli billionaire Teddy Sagi, bucked the trend, rising 3.25p to 168.25p. The owner of Camden Market revealed the value of its property portfolio jumped 31% to £988 million, a 12% rise before acquisitions.

If AIM punters feel hard done by, they should spare a thought for their Canadian counterparts.

Mkango Resources, a company hunting for rare earths in Malawi, has felt the strain on the TSX Venture Exchange in Toronto and is set to dual-list on AIM tomorrow. 

Its share price has crashed 97% in five years. 

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June 14, 2016 |
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