Shares in several of the UK's largest consumer electronics retailers have stabilised this morning after plummeting yesterday afternoon, following Citigroup issuing a raft of sell recommendations.The move by the broker saw shares in DSGi, Kesa, Next and Home Retail Group fall sharply, with the largest fall hitting Next hardest – down 81 pence or 7.4 per cent to 1,016 pence a share, thanks to a combination of worries over the impact consumer confidence would likely have on both of its technology and clothing departments.
DSGi's shares fell by 8.5 pence or 15 per cent to 49.25 pence, reaching levels the retailer has not seen since January 24th 1995, while Kesa finished down 19.25 pence at 170.35 pence, although at the time of writing, shares had risen to 173.75 pence.
Home Retail Group also saw its shares hit yesterday to the tune of 2.4 per cent. However, shares fell even further this morning after the firm announced that sales at the second largest consumer electronics retailer in the UK, Argos had fallen flat in the first quarter of the year. At the time of writing, shares were down 16.5 pence or 7.37 per cent.
Citigroup analyst Richard Edwards wrote in an investment note: "The outlook for the UK consumer is looking pretty dire. We now expect the peak of this brutal slowdown to be felt in 2009.
Higher UK inflation forecasts, a 'higher-for-longer' interest rate forecast agenda and deteriorating UK housing market and consumer confidence metrics," he added.
Source: Bloomberg
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