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Burberry sinks on CEO departure

by LLB Editor
28th Jun 21 10:27 am

Global markets kicked off the week with a subdued tone, with minimal changes to the major indices across Europe and Asia.

The FTSE 100 was flat at 7,132 with healthcare, consumers goods, utilities and miners the only sectors to show any positive signs of life.

“The market was disappointed that Burberry chief executive Marco Gobbetti is stepping down, prompting a 9% decline in the share price. That shows how much he is credited with the success of the luxury goods business,” says Russ Mould, investment director at AJ Bell.

“Share prices can rise when a CEO resigns if the market didn’t like the incumbent as it suggests optimism towards the company finding someone better to do the job. Equally, share prices can fall when a CEO resigns if they are an integral part of the company’s success.

“Brent crude oil prices held firm above $76 per barrel while gold nudged 0.1% ahead to $1,784 per ounce. Higher oil prices aren’t good for airlines as fuel is a major cost. That factor, together with fading hopes of a profitable summer for the industry, saw shares in the major airlines decline between 2% and 3%, including weakness in EasyJet and Jet2.”

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