Archived article
Please note that tax, investment, pension and ISA rules can change and the information and any views contained in this article may now be inaccurate.
magazineDP Eurasia out in the cold due to currency crash
DP Eurasia (DPEU) 92.9p
Loss to date: 35% (stopped out)
Original entry point: Buy at 230p, 9 November 2017
Takeaways firm DP Eurasia (DPEU), which operates the Domino’s Pizza franchise in Russia and Turkey, has seen its shares fall heavily as the Turkish lira has been devalued.
DP reports in Turkish lira and its shares are sterling denominated. Put together this is a toxic combination and the shares are now
trading at less than half the level they were at when we highlighted the company’s attractions in November 2017.
To date, trading has held up reasonably well if you put the currency headwind to one side but the currency collapse in Turkey may have an impact on the consumer environment in the country.
As essentially a US brand, the company could also be affected by president Recep Tayyip Erdogan’s anti-American rhetoric in the wake of the crisis.
The company will be able to address these points when it reports half year results on 11 September but for now this looks like a salutary reminder of the risks associated with investing in emerging markets focused businesses.
Our stop loss has been triggered, so DP Eurasia is now removed from our Great Ideas portfolio.
Important information:
These articles are provided by Shares magazine which is published by AJ Bell Media, a part of AJ Bell. Shares is not written by AJ Bell.
Shares is provided for your general information and use and is not a personal recommendation to invest. It is not intended to be relied upon by you in making or not making any investment decisions. The investments referred to in these articles will not be suitable for all investors. If in doubt please seek appropriate independent financial advice.
Investors acting on the information in these articles do so at their own risk and AJ Bell Media and its staff do not accept liability for losses suffered by investors as a result of their investment decisions.
