MARKET REPORT: Rolls-Royce shares wobble as the engineering giant's largest investor demands a shake-up

Shares in Rolls-Royce wobbled after the engineering giant's largest investor attacked its management. 

Jonathan Eng, portfolio manager at American firm Causeway Capital, said he would urge incoming chairman Anita Frew to consider shaking up the plane engine maker's top team. 

Los Angeles-based Causeway has built up its stake to around 9pc, suggesting it is bedding in for the long-haul. It comes a year another American activist investor, Value Act Capital, ditched its holding. 

Eng said he will be asking Frew: 'Do we have the right people now that will ask questions when sticky situations come up, because they will come up?' 

Frew takes over from chairman Sir Ian Davis in October, giving the management a bit of time to prepare a case. Though Eng did not name names, chief executive Warren East is likely to be feeling the pressure. 

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Rolls is the most prestigious British engineering group but it had been struggling for years with a bloated middle management and unsuccessful restructurings. To respond to Covid, which wiped out its major source of income maintaining plane engines, East last year launched a third turnaround programme in five years. 

It is taking its time to pay off though plans to sell £2bn of businesses have made progress Rolls fell 1.6pc, or 1.88p, to 114.86p, as investors digested Eng's comments, made on Monday. 

Another engineer, mining specialist Weir, made gains following an upgrade from brokers at Peel Hunt. Analysts moved its rating to 'buy' from 'hold' and upped the target price on the 150-year-old company's stock to 2250p, a whopping jump from the previous guidance of 860p. 

They said a recent drop in the price provides a 'great opportunity' and that it was a consistently good performer. It rose 3.8pc, or 64p, to 1751.5p. Airline stocks dragged on the wider market.   

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Reference: This is Money: Francesca Washtell City Correspondent For The Daily Mail