A BROKER has warned Weir Group’s share price appears unlikely to bounce back significantly in the short term.
Mike van Dulken, head of research at Accendo Markets, said not too much can be read into signs of positive movement earlier in the week.
He said: “The recent bounce may have been driven by hopes of an upbeat announcement (UK fracking?) ahead of the [third quarter] interim statement on November 3, potential for the company to benefit from oil and gas sector consolidation and a potential slowing in US oil production fuelling a firmer oil price and thus more investment and need for its services.”
Weir’s shares are also going to suffer once its formal demotion from the FTSE100 to FTSE350 takes place next week.
It is being replaced in the top flight by housebuilder Berkeley.
Mr van Dulken added that the engineering group continues to be affected by oil and gas sector analyst downgrades, the strong dollar and uncertainty around global growth.
Shares in Weir, headed by chief executive Keith Cochrane, were changing hands for more than 2700p at the start of September last year.
Weir shares were down 52p and being sold at around 1255p by noon.
Glasgow based Weir has cut jobs and launched a multi-million pound savings drive in response to the downturn in the oil and gas market. The bulk of the cuts have come in its United States division where it has a large exposure to fracking.
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