MARKET REPORT: Carnival cruises thanks to increased demand from Chinese holidaymakers

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Cruising ahead: Carnival saw rising sales of tickets for its luxury cruises in Asia

Carnival may have given its shareholders a choppy ride this year, but yesterday it was one of only a handful of blue chip stocks to keep its head above water.

Shares in the world’s largest cruise operator steamed ahead to touch 2556p before closing 6p better at 2443p as buyers climbed aboard following a better-than-expected third-quarter trading update.

The Florida-based group reported that increased demand from Chinese holidaymakers boosted sales of tickets for luxury cruises in Asia.

It was a big turnaround from June’s outcome when the group’s quarterly adjusted profits had been hit by increased competition in the Caribbean cruise market.

Net income for the third quarter rose to $1.25billion, or $1.60 per share, from $934million, or $1.20 per share, while revenues rose 4.7 per cent to $4.95billion. 

 

Carnival’s chief executive Arnold Donald had analysts reaching for their blue pencils as he raised earnings forecasts for the full year. Deutsche Bank reiterated its ‘buy’ stance and target price of 2830p. January’s high was 2615p.

Broker Shore Capital recently upgraded to buy from hold, suggesting that more and more Chinese will be cruising in the coming years. Analyst Greg Johnson said that the number of households in China earning more than $35,000 per annum is expected to almost quadruple to 80million by 2022.

The size of the affluent middle class would be similar in scale with the US today, which accounts for broadly half of the global cruise market. If current penetration rates were maintained this would be equivalent to 1.5million additional passengers to the cruise industry.

After recently trading within 25 points of its all-time high of 6,930.2, attained at the end of December 1999, the fragile Footsie dropped below 6,700. It was sold down to 6,647.21 before closing 97.55 points lower at 6,676.08.

Wall Street didn’t help by trading 50 points off at the outset following an escalation of tensions in Syria.

The healthcare sector at one stage accounted for 23 points of the fall after the US Treasury Department announced a series of measures that will make it harder for US companies to re-domicile in order to reduce their corporate tax liabilities.

The move against so-called tax inversions led to fears that merger and acquisition activity will now dry up because tax savings played a significant part of the attraction for a bid.

Shire succumbed to nervous selling on fears that the agreed bid from AbbVie could now hit the buffers and touched 4914p before finishing 130p down at 5100p.

AstraZeneca plummeted 163.5p to 4414p as dealers said the chances of Pfizer returning with a new cash offer are now virtually nil. Remember, it had bid £55 a share or £69billion!

Replacement hip group Smith & Nephew, which has attracted the attention of Stryker and Medtronic this year, shed 30p to 1038p.

Tesco’s shares were put through the mincer again following Monday’s shock revelation of accounting shenanigans. They were heavily sold down to 193p and closed 8.5p cheaper at 194.5p.

Kantar Worldpanel data showing its market share had fallen to 28.8 per cent from 30.2 per cent over the past 12 weeks later rubbed salt into its gaping wounds. Rival Sainsbury’s was also friendless at 263.8p, down 15p, as it saw its market share fall 1.8 per cent to 16.2 per cent over the same period.

Sellers were all over Regenersis like a rash, despite record full-year results. Investors were concerned about £5million of acquisition costs, some related to April’s £49.6million purchase of Blancco. There was also £4.4million of restructuring charges against its advanced solutions division.

The close was a painful 84p or 26 per cent down at 241p. The March high was 409.75p. Stockbroker Panmure Gordon showed it has enjoyed this year’s flood of IPOs and corporate fundraising by reporting a 26 per cent gain in first-half commission and trading income to £5.4million.

Pre-tax profits rose to £1.9million from £0.3million and the board proposes to pay a dividend next year. It gained 14.5p to 155p. Many investors fell out of love with online dating group Cupid ages ago, and yesterday it slipped another 2.75p to 29.75p on hearing that half-year losses had increased by 20 per cent to £3million.

It has been nobbled by dating app Tinder, which lets smartphone users see other ‘players’ within a small radius and contact them instantly. In retaliation, Cupid is set to launch its own app.

International consumer self-care group Venture Life edged up a penny to 87p after signing long-term product distribution agreements with four new partners, Valeant, Lyfis, Symphar and Deltapharma.

The agreements give these distributors exclusive rights to sell certain Venture Life products across a total of nine European territories, including Germany.