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Thomson Reuters leads FTSE retreat

Thomson Reuters was among shares leading a retreat on the London Stock Exchange on Thursday and ended down more than 5 per cent to a post-merger low.

At mid-day the stock TRIL.L was at 1,366 pence, some 73 pence or 5.07 per cent lower. The FTSE-100 was down 1.2 per cent at 5,602.90.

At the close, Thomson Reuters had lost 5.6 per cent to 1,359 pence, a loss of 80 pence on the day.

On their first day of trading, 17 April, Thomson Reuters ended at 1,560 pence.

Investment bank Morgan Stanley reduced its price estimate by 9.9 per cent to 1,280 pence from 1,420 pence and maintained its Underweight recommendation on the share.

It said it expects revenue in the financial division to fall by 2.8 per cent in 2009 as banks cut jobs and try to cut down on their market data costs.

“We expect quarterly revenue growth to slow rapidly in the second half of 2008 and to go negative in the first quarter of 2009,” it said in a research note.

“Our negative growth forecast is predicted on the ongoing retrenchment in investment bank headcount and market data spend,” London-based analyst Patrick Wellington wrote.

He added: “Management does not believe that Reuters revenues will show negative growth in 2009 despite the experience of 2002 and 2003, when recurring revenues dropped by 4 per cent and 10 per cent as investment banking markets were impacted by the fall-away post the internet boom.” ■