finnCap have initiated a buy recommendation on wealth management company Kingswood. finnCap have attached a price target of 39p with their recommendation.

Kingswood has undergone a dramatic turnaround under the lead of CEO David Lawrence and finnCap now forecast EBiTDA of c£20m.

Kingswood has embarked on a wave of acquisitions since the new CEO started in 2020 and now has Kingswood £9.1 billion of Assets under Advice and Management and over 19,300 clients.

The company has global operations after entering the US with a number of acquisitions.

Kingswood is now pursing further growth by continuing their strategic acquisitions. Funding for their strategy is readily available after Pollen Street Capital provided up to £80m of growth capital to fund acquisitions.

finnCap highlighted the benefits of increasing scale for wealth management companies and made comparisons to the high margin business model of St James’s Place.

The FTSE 100 plunged once more on Monday as the West stepped up their fight against Russia with a raft of economic sanctions.

In a unified effort from Western countries to economically punish Russia, Russia was banned from Swift and the central bank had its assets frozen.

At the time of writing, the FTSE 100 had fallen by 1.21% as markets digested the implications on the wider financial system.

The Russia central bank has been banned from accessing assets which will slow down the entire Russia financial system, and the sanctions on banks has led to queues of Russians trying to get hold of their cash, raising fears of a run on the banks.

The Russian central bank doubled interest rates to 20% after the Rouble sank 30%.

Although there was a comprehensive package of sanctions imposed on Russia, they spared the exports of oil and gas on which the Russian economy so much relies.

“Disturbing footage of Russia’s invasion of Ukraine over the weekend and the former’s decision to put its nuclear forces on high alert has served to spook investors once again, with equity markets falling across Europe,” said Russ Mould, investment director at AJ Bell.

“Weighing on the FTSE 100 was a 6.1% decline in BP, its biggest one-day fall since November 2021 and driven by the decision to exit its stake in Russian oil producer Rosneft.”

BP

BP announced it would seek a sale of its 19.75% stake in Rosneft and the financial impact would start to be evident in first quarter results.

The company is reported to have agreed to relinquish its stake in Rosneft following pressure from business secretary Kwasi Kwarteng over the weekend. BP will also step down from the board of the Russian petroleum producer.

“Attention will now turn to how exactly BP will affect an exit and likely bidders for its stake,” said Russ Mould, investment director at AJ Bell.

“There could be interest from Qatar, which already has its own position in Rosneft, or perhaps another name in the Middle East or China whose relations with Russia are less toxic.”

FTSE 100 movers

Although the FTSE 100 fell sharply, several companies saw decent gains. The top risers included BAE Systems, Hikma Pharmaceuticals and Bunzl..

BAE Systems share price enjoyed a rise of 10.6% to 722.5p on the back of Russia’s invasion of Ukraine spurring purchase orders and interest in the arms contractor.

Hikma Pharma was up 8.73% to 2,117p per share and Bunzl saw an increase of 6.27% to 2,932.5p.

Bunzl plc released its financial results from 2021 on Monday, and reported that it had seen its pretax profit amount to £568.7 million, an increase of 2.3% from £555.7 million in 2020.

Russian Listings Sink

FTSE 100 companies with a focus on Russia were gain destroyed by traders reacting to latest develops in the crisis.

Evraz shares sank 28% to trade at 147p on Monday following the new sanctions from the West on Russia.

Evraz has seen serious swing in their share price since Friday when the Russia-focused steel producer was up a good 20% after releasing their earnings report.

Net profit increased by 262% to $3.1bn in 2021 as sales jumped on higher commodity prices. EBITDA increased by 126% to $5bn.

Polymetal

Polymetal shares plunged 46% to 426p and was the FTSE 100’s top faller as investors fled the stock.

Polymetal said last week that all its operations in Russia and Kazakhstan continue as usual and the sanctions announced to that point had not affected Polymetal.

This is no longer likely to be the case for the FTSE 100 miner with fresh sanctions over the weekend.

BP has announced its intention to exit from the company’s 19.75% stake in state-owned Russian oil company Rosneft, worth approximately $14 billion.

The BP share price was rocked by the news and dropped by 5% to 359p in early trade on Monday.

The energy giant is estimated to take a hit of $25 billion, which it is expected to begin report in its Q1 2022 financial results, following confirmations that the company would no longer recognise a stake in Rosneft’s reserves, net income and production.

The company reportedly chose to drop its stake following a twenty-minute call from Business Secretary Kwasi Kwarteng to discuss the implications of BP’s stake in the Russian petroleum producer, which it has held since 2013.

The move came as BP executives Bernard Looney and Bob Dudley also announced their departure from the Rosneft board.

“Like so many, I have been deeply shocked and saddened by the situation unfolding in Ukraine and my heart goes out to everyone affected,” said Looney.

“It has caused us to fundamentally rethink BP’s position with Rosneft.”

BP chair Helge Lund added: “Russia’s attack on Ukraine is an act of aggression which is having tragic consequences across the region.”

“BP has operated in Russia for over 30 years, working with brilliant Russian colleagues. However, this military action represents a fundamental change.”

“It has led the BP board to conclude, after a thorough process, that our involvement with Rosneft, a state-owned enterprise, simply cannot continue.”

“The Rosneft holding is no longer aligned with BP’s business and strategy and it is now the board’s decision to exit BP’s shareholding in Rosneft.”

“The BP board believes these decisions are in the best long-term interests of all our shareholders.”

Analysts have weighed in that BP made a wise decision to sell its Rosneft stake, however they cited that the company will be in a poor negotiating position to find a buyer for its shares.

“In a move that feels seismic but at the same time completely unsurprising, BP has announced plans to offload its stake in Russian oil company Rosneft,” says Russ Mould, investment director at AJ Bell.

“Remaining invested in Rosneft could almost be literally construed as fuelling the Russian war effort and that would not have been a sustainable position for much longer.”

“Despite the financial cost shareholders are likely to be relieved that BP has taken pre-emptive action.”

“There had already been indications that the UK government was uncomfortable with BP‘s Russian links although forcing it to exit its holding in Rosneft would probably have required legislation.”

“Attention will now turn to how exactly BP will affect an exit and likely bidders for its stake.”

“Ultimately the company is in a weak negotiating position and may have to accept a cut price deal.”