Deutsche Bank downgrades Thomson Reuters

It said it sees revenue shortfall in the company’s markets division from the turmoil in the financial markets.

Fifty per cent of the division’s revenue are headcount driven and this will now decline faster than previously expected, analyst Mark Braley wrote in a note to clients.

“The direct hit to TR Market’s headcount-driven business will be severe,” Braley said. He now expects the investment banking industry to lose 25 per cent of jobs in 2008-2010, up from his previous forecast of 15 per cent.

The job losses will be as severe as those seen in the 1969-1975 downturn and far worse than 1987-1991 or 2001-2003, he believes.

Bank failures and mergers will cut demand for Thomson Reuters’ systems and software while a sustained period of market paralysis will see a drop in usage volumes. Pricing will be inevitably weaker.

Thomson Reuters shares traded on the London Stock Exchange at 1,360 pence, up 7.09 per cent, at 0920 GMT. ■