VISA AND MasterCard, the world’s biggest payments networks, fell the most in at least two months after UBS recommended investors sell their shares amid a global slowdown in consumer spending.
Visa slid 2.3 per cent to $122.41 in early trade in New York after earlier declining 3.4 per cent, the biggest drop for the San Francisco-based firm since May. MasterCard fell 3.5 per cent to $426.15 after sliding as much as 4.2 per cent, the biggest decline since April.
UBS analyst John Williams changed his rating on the firms’ shares to sell from neutral, citing weaker US economic data and a global slowdown in growth.
He said this could harm Visa and MasterCard, which are among the top three performing shares in the Standard Poor’s information technology index since 2011.
The companies’ shares “sit near all-time highs despite exposure to a weakening global consumer spending backdrop, which makes a slowdown in key metrics inevitable . . . ”, Mr Williams wrote.
MasterCard has gained 97 per cent from the beginning of 2011 through July 6th, outpacing Apple, which rose 88 per cent. Visa has gained 78 per cent. – (Bloomberg)
