Rolls Royce shares record record week on capital raising

LONDON (Reuters) – Rolls Royce RR.L Shares were heading for their best weekly gain since listing in 1987 on Friday as the British aero-engine maker’s plan to raise funds to tackle the coronavirus travel crisis sparked a hunt for good business among investors.

FILE PHOTO: A man looks at the Rolls Royce Trent engine on display at the Singapore Airshow in Singapore February 11, 2020. REUTERS/Edgar Su/File Photo

The value of Rolls Royce shares more than doubled in the past week to 228.90p, although that’s still a far cry from the 690p they traded at before the coronavirus outbreak.

The company is aiming to raise a total of £5 billion, including £2 billion from shareholders, to deal with a “worst-case scenario”.

“(The recapitalization plan) puts Rolls-Royce in place enough to navigate an uncertain recovery and removes any lingering worries about liquidity – and even solvency,” said Berenberg analyst Andrew Gollan, retaining a “buy” rating. ” on the title.

Concerns over a long-haul travel crisis have reduced the market value of Rolls Royce to just 3.8 billion pounds ($4.9 billion), from 20.5 billion pounds two years ago.

“There is a clear drive to go bargain hunting as traders are starting to see the light at the end of the tunnel,” said Joshua Mahony, senior market analyst at IG.

Susannah Streeter, senior investment and market analyst at Hargreaves Lansdown, said there had been “renewed interest from retail investors”, with Rolls Royce shares being the most bought by its clients over the course of the year. week ending October 8.

The Capital Group of Companies, a major investor, increased its stake in Rolls to 8.70% from 7.91% on Thursday.

Rolls Royce shares rose 17.8% at 11:36 GMT on Friday, among the best performers on the pan-European STOXX 600 .STOXX index. Analysts said the stock still looked cheap.

($1 = 0.7723 pounds)

Reporting by Joice Alves; Editing by Kirsten Donovan

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