uploads///Rolls Royce Holdings versus Meggitt

Rolls-Royce Holdings and G4S Caused EWU to Fall 0.78%

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Nov. 20 2020, Updated 4:26 p.m. ET

Key stocks

Stocks at the top of the iShares MSCI United Kingdom (EWU) on November 13, 2015, were Anglo American (AAL), Melrose Industries (MRO), and Pearson (PSON). These stocks rose 1.4%, 1.3%, and 1.0%, respectively, on that day.

Stocks at the bottom of EWU on November 13 were Rolls-Royce Holdings (RR)(RR)(RR) (RYCEY), G4S (GFS)(GFS), and Aberdeen Asset Management (ADN). These stocks yielded -4.3%, -3.6%, and -3.5%, respectively, on the day.

The following graph shows the price movement of Rolls-Royce Holdings (RR)(RR)(RR) compared to Meggitt (MGGT) since October 2015.

Stocks of Rolls-Royce Holdings (RR)(RR)(RR) (RYCEY) fell on November 13, as the company had issued profit warnings and hinted about the possibility of a dividend cut.

G4S’s (GFS)(GFS) price target was lowered by analysts at RBC Capital from $3.46 to $3.16. The rating issued for the stock was “underperform.”

Stocks of BHP Billiton (BHP) and Rio Tinto (RIO) rose 1.3%, and 0.74%, respectively, on November 13, 2015.

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UK concerns rose with construction output

The iShares MSCI United Kingdom ETF (EWU) fell 0.78% on Friday, November 13. Only 18 stocks of the 108 constituent stocks of EWU could manage a positive return that day.

The UK Office for National Statistics released its construction output report for September 2015. According to the report, output in the construction industry fell 1.6% year-over-year. The forecast reading was only -0.4%. So the third quarter proved very gloomy for both the mining and construction industries as well as the building material industry.

The rising dollar is also a concern for commodities denominated in the US dollar. While the European Central Bank is extending its stimulus in European countries, the Federal Reserve is looking forward to increasing the interest rate in the wake of strong economic indicators.

Both monetary policies are expected to lead to a widening exchange rate gap between the euro and the US dollar. The forecast for Chinese demand for industrial materials is also not strong enough for the coming year. This has added to concerns of UK investors, and thus they’re trading cautiously.

For more information on global equities, visit our Global Equity ETFs page.

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