As BP’s Chief Executive Tony Hayward was testifying to the US Congress, the oil giant’s shares picked up in London in reaction to news that it is setting aside 20 billion dollars and suspending dividend payments to meet damage claims from its Gulf of Mexico spill.
That removed uncertainty over the dividend and size of the fund.
BP shares have slumped from over six pounds to around three pounds sixty pence, a more than 40 percent drop since the April 20 explosion of the Deepwater Horizon rig that led to the worst US oil spill ever.
But there is now a feeling in the markets the shares have been oversold, on a knee-jerk basis.
A survey of institutional investors in the UK – such as pension funds – found most intend to hang on to the stock on the basis that BP will bounce back and resume paying dividends in the next three to five years.