STOCKS NEWS EUROPE-Old Mutual weak; KBW downgrades

Shares in Old Mutual (OML.L) shed 1 percent after Keefe, Bruyette & Woods downgrades its rating for the South African-based insurer and fund manager to "underperform from "market perform" on valuation grounds.

The broker says in a note that after 76 percent outperformance in the year to date, Old Mutual no longer offers relative value.

KBW adds that Old Mutual's recent strategic review implies little prospect of short-term restructuring benefits, despite interest from active investors.

The broker also sees a weakening rand and high exposure to equity market risk as negative near-term catalysts, with Old Mutal highly exposed to the UK and South Africa where the deflating retail property bubbles should do the most damage.

Reuters Messaging rm://jon.hopkins.reuters.com@reuters.net