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9/15/2010 - The Economic Monitor U.K. Free Edition

9/15/2010 - The Economic Monitor U.K. Free Edition

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- Stock recommendations and price targets from top brokerage firms
- Forecasts on Economic Indicators
- Important Events Scheduled on 16 September

Economic Events
- Bank of England's governor gives evidence to MPs on Inflation Report.
- Pope Benedict XVI will visit England and Scotland from September 16-19.
- Rwanda President Paul Kagame visits United Kingdom on Thursday 16 September, 2010.
- Economists emerging market summit last day conference at The Connaught Rooms, London.

Corporate Events
- Kingfisher, BlueBay Asset Management, Centaur Media, Dunelm Group, Kier Group, Quayle Munro earnings releases

Breaking News
- Next lift H1 profits rise
- SSE launches „iplan’
- Resolution adds AXA men to board
- STM profits take off
- Terra Firma is set for EMI buy out dispute trial
- BP's North Sea record under scrutiny
- Jobless claims rise in August, first time since Jan
- Monetary policy is the best tool: King
- China closely watches BHP's bid for Potash
- FDA delays AstraZeneca's drug Ticagrelor
- Uncomfortably high inflation at the moment: David
- Green growth may boost U.K. economy
- EU sets news rules for short-selling
- Stock recommendations and price targets from top brokerage firms
- Forecasts on Economic Indicators
- Important Events Scheduled on 16 September

Economic Events
- Bank of England's governor gives evidence to MPs on Inflation Report.
- Pope Benedict XVI will visit England and Scotland from September 16-19.
- Rwanda President Paul Kagame visits United Kingdom on Thursday 16 September, 2010.
- Economists emerging market summit last day conference at The Connaught Rooms, London.

Corporate Events
- Kingfisher, BlueBay Asset Management, Centaur Media, Dunelm Group, Kier Group, Quayle Munro earnings releases

Breaking News
- Next lift H1 profits rise
- SSE launches „iplan’
- Resolution adds AXA men to board
- STM profits take off
- Terra Firma is set for EMI buy out dispute trial
- BP's North Sea record under scrutiny
- Jobless claims rise in August, first time since Jan
- Monetary policy is the best tool: King
- China closely watches BHP's bid for Potash
- FDA delays AstraZeneca's drug Ticagrelor
- Uncomfortably high inflation at the moment: David
- Green growth may boost U.K. economy
- EU sets news rules for short-selling

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Published by: International Business Times on Sep 15, 2010
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09/15/2010

 
 
15 September 2010
THE ECONOMIC MONITOR U.K.
The
FTSE 100 index
closed down 11.85 points, or 0.2percent at 5,555.56, snapping a five session winning streak.
By 1037 GMT,
sterling
had fallen 0.2 percent at $1.5502against a broadly firmer dollar, marking a reversal fromTuesday.
By 1326 GMT,
December gilt futures
were 38 ticks downat 122.84, reversing most of the previous session's gains.
European market
Brent
dipped by 40 cents to $78.76.
Spot gold
was little changed at $1,268.60 an ounce by1530 GMT.
MARKETS AT A GLANCESTOCK INDICESCURRENCIES
INDEX LAST PRIOR 
Euro (EUR/USD)1.30061.3008U.K. Pound (GBP/USD)1.56141.5559Japanese Yen (USD/JPY)85.6183.1
All prices are at 11:43 AM EDT 
FUTURES
INDEX LAST CHNG % CHNG
FTSE 100* 5555.56-11.85 -0.21FTSE 250* 10494.2721.83 0.21FTSE 350* 2932.41-4.61 -0.16FTSE Tech Mark 100* 1942.638.03 0.42FTSE AIM 100* 3449.354.88 0.14FTSE All Share* 2868.06-4.04 -0.14FTSE Eurofirst 300* 1085.14-2.49 -0.23DAX* 6261.87-13.54 -0.22CAC 40* 3755.64-18.76 -0.5Stoxx Europe 50 2573.64-13.58 -0.52* CLOSING VALUES
LAST CHANGE
Crude Oil75.43 -1.37Natural Gas4.22 0.051Gold, Dec.1270.3 -1.40Copper (¢), Dec346.65 -0.20Wheat (¢), Dec.766 1.00
All prices are at 11:32AM EDT 
Stock recommendations and price targets from topbrokerage firms
Forecasts on Economic Indicators
Important Events Scheduled on 16 September
Economic Events
Bank of England's governor
gives evidence to MPs onInflation Report.
Pope Benedict XVI
will visit England and Scotland fromSeptember 16-19.
Rwanda President Paul Kagame
visits United Kingdomon Thursday 16 September, 2010.
Economists emerging market summit last day conferenceat The Connaught Rooms, London.
Corporate Events
Kingfisher, BlueBay Asset Management, CentaurMedia, Dunelm Group, Kier Group, Quayle Munro
earnings releases
Breaking News
Next
lift H1 profits rise
SSE
launches „
iplan’
 
Resolution adds
AXA
men to board
STM
profits take off 
Terra Firma
is set for
EMI
buy out dispute trial
BP's
North Sea record under scrutiny
Jobless claims
rise in
August
, first time since Jan
Monetary policy is the best tool:
King
 
China closely watches
BHP's
bid for
Potash
 
FDA
delays
AstraZeneca's
drug Ticagrelor
Uncomfortably high inflation at the moment:
David
Green growth
may boost U.K. economy
EU
sets news rules for short-selling
INSIDE THE REPORT
Free Edition 
 
THE ECONOMIC MONITOR - U.K.
Disclaimer 
: The views and investment tips expressed by investment experts are their own, and not that of IBTimes or its management. We advise users to check with certified experts before taking any investment decisions.
MARKET BRIEFING
BROKERAGE/COMPANY ACTIONS RATING
Microgen Raises price target to 122p from 97p Buy
Natixis
Morrison Supermarkets Cuts to neutral from Buy Neutral
Jefferies
Associated British Food Raises price target to 1,200p from 1,140p Buy
Goldman Sachs
United Utilities Group Raises price target to 568p from 557p - -Scottish & Southern Energy Raises price target to 1,158p from 1,109p - -Northumbrian Water Group Raises price target to 329p from 266p - -National Grid Raises price target to 535p from 480p - -Severn Trent Raises price target to 1,473p from 1,313p - -Shanks Group Cuts price target to 151p from 153p - -Centrica Raises price target to 443p from 434p - -Drax Group Cuts price target to 525p from 591p - -Pennon Group Raises price target to 667p from 532p Neutral
Barclays
Shire Recommends price target of 1,700p Overweight
Deutsche Bank 
Burberry Group Raises price target to 875p from 850p Hold
UBS
JD Wetherspoon Cuts price target to 525p from 560p BuyRightmove Recommends to neutral from buy NeutralRegus Cuts price target to 100p from 125p Buy
Commodity stocks pulled Britain's top shares lower as U.S. data showed a sharp slowdown in industrial output, and after investorsswitched into the dollar after BOJ's yen intervention and recent sharp gains. The
FTSE 100 index
closed down 11.85 points, or 0.2percent at 5,555.56, snapping a five session winning streak, having inched higher late on Tuesday to extend Monday's four-monthclosing peak. Heavyweight mining and energy stocks fell in tandem with crude and base metal prices as worries persisted over thechoppy economic recovery in the U.S.
Sterling
touched a seven-week low against the euro and fell against the dollar as a surprise jump in unemployment fed concerns aboutthe U.K. economic outlook. By 1037 GMT,
sterling
had fallen 0.2 percent at $1.5502 against a broadly firmer dollar, marking a reversalfrom Tuesday, when persistently high U.K. inflation data boosted the pound. Against the yen, the pound jumped 2.7 percent to 132.41yen as cross yen pairs soared after Tokyo intervened for the first time in six years to rein in yen gains, but traders doubted Japan boughtanything other than dollars in the move. The pound touched 84.00 pence against the euro in early European trade, the lowest since lateJuly. The euro was last up 0.1 percent at 83.67 pence.
British gilt futures
fell, keeping in step with Bunds, as investors digested supply, comments from Bank of England policymakers andbraced for more gilt issuance on Thursday. By 1326 GMT,
December gilt futures
were 38 ticks down at 122.84, reversing most of theprevious session's gains, and keeping in line with the equivalent Bund. In the cash market, the yield on ten-year gilts was 4 basis pointshigher at 3.091 percent.
Oil
trimmed earlier losses due to a fall in U.S. inventories, while the recovery prices was limited by the potential reopening of thebiggest Canada-U.S. crude pipeline. The
 yen
slipped against the U.S.
dollar
and the euro as Japan's central bank intervened to sell itscurrency for the first time in six years. By 1459 GMT, U.S. crude for October was trading $1.19 lower at $75.61 a barrel, having fallenmore than $2 earlier. European market Brent dipped by 40 cents to $78.76. Crude oil inventories in the United States, the world's top oilconsumer, fell 2.49 million barrels in the week to Sept. 10, mostly in line with analysts' forecast, weekly data from the U.S. EnergyInformation Administration showed.
Gold
hovered near record highs on the second anniversary of the collapse of 
Lehman Brothers
, holding flat on the day in dollar terms,yet hitting two-month highs in yen after Japanese currency intervention. Spot gold was little changed at $1,268.60 an ounce by 1530GMT, after having surged more than 2 percent to a record $1,274.75 the day before. U.S. gold futures for December delivery were down$1.70 an ounce at $1,270.10. Gold in yen terms rose to a high of 108,737 yen an ounce on Wednesday, showing a three-percent gain onthe day and rising to its highest since early July, echoing a sharp fall in the yen.
STOCK RECOMMENDATIONS BY BROKERAGE HOUSES
 
THE ECONOMIC MONITOR - U.K.
COMPANY NEWS
Next lift H1 profits rise
U.K. clothing retailer
Next
has announced its firsthalf results with 12 percent rise in its net profit.Next reported the net profit of 155 million pounds($241 million) and revenue growth of 5 percent at1.59 billion pounds. The group reported growth inits catalog business, with addition of new space inits retail arm but announced 1.5 percent fall incomparable sales during the period. Pretax profitrose 15 percent to 213.3 million pounds, in linewith the group's guidance, and lifted its interim dividend by 6 pence a share to25 pence. For the year as a whole, the company expects Next brand sales to bebetween flat and 2% higher than a year earlier.
SSE launches ‘iplan’
 
The
Scottish & Southern Energy (SSE)
has announced the nationwide launch
of a smart energy kit called „iplan‟. The kit enables customers to track their en-
ergy use in real time and provides archived information on energy usage.
Alistair Phillips-Davies
, Energy Supply Director of SSE said, “The development
of new products is central to success in Britain's competitive energy supply mar-ket. The iplan will transform the amount of information that customers haveabout their energy consumption, by giving them a user-friendly presentation of 
energy data at their individual level.”
 
Resolution adds AXA men to board
Resolution
has made a number of manage-ment changes after completing the £2.75 bil-lion acquisition of French insurer
AXA’s
lifeinsurance businesses.The firm keeps
Trevor Matthews
as boss of Friends Provident. Matthews will be joined onthe board of Resolution unit Friends ProvidentHoldings by former AXA men
David Hynam
and
Andy Parsons
. Hynam becomes executive director of operations, while therole of chief financial officer will be split between Parsons, as executive director of finance, and ex-Friends CFO
Evelyn Bourke
who‟s now responsible for strategy,
capital and risk. Graham Harvey and
Paul McMahon
have been brought overfrom AXA to lead market facing business units covering individuals and corpo-rate.
STM profits take off 
STM
hopes the surge in half-year profits following a reorganisation and pro-gramme of cost-cuts has brought its terrible run of form to an end.The company, which helps individuals and businesses with tax, legal, trust andpensions needs, bumped up pre-tax profit to £679,000 in the first six months of 2010 from £182,000 a year ago. It generated £3.45 million, more than 70% of total group revenue, during the period, up from £2.46 million last time.
Terra Firma is set for EMI buy out dispute trial
Guy Hands’
private equity firm
Terra Firma Capital
has been granted the rightto take
Citigroup
to trial over the advice it gave on the acquisition of musiccompany
EMI
. Terra Firma acquired EMI in 2007 and it argues that Citigroupinflated the price of EMI by not revealing to Terra Firma that it was the only bid-der.
BP's North Sea record under scrutiny
BP’s
safety record in the North Sea has come under more scrutiny after publica-tion of a letter from the
Health and Safety Executive
that criticised four of the
firm‟s installations for oil spill procedures in 2009.The inspectorate also said that BP “did not appear to identify the significance of issues raised by the complainant once they were put to you by HSE”. BP replied
to the HSE that its processes had been reviewed and improved by November.
ECONOMY NEWS
Jobless claims rise in August, first time since Jan
The number of workers claiming jobless benefits increased by 2,300 to 1.4663million in August, according to the data from Office for National Statistics. It isfirst monthly rise since January. Economists had expected a fall of 5,000. Personsclaiming benefits was 4.5% of the workforce, unchanged from July. The
unemployment rate
for the three months ending in July was 7.8%, down from7.9% in the previous three months. Unemployment fell by 8,000 over the quarterto 2.47 million, the ONS said. Average earnings, excluding bonuses, over the May-July period rose at an annual rate of 1.8%.
Monetary policy is the best tool: King
Bank of England
Governor
Mervyn King
said thegovernment had no choice and had to cut the deficit. Heemphasized on monetary policy being the best tool tomanage the economy. In his speech to a meeting of the
Trades Union Congress
in Manchester, he said vaguepromises by the government to reduce the deficit wouldnot have been enough. King said since monetary policycan be changed in either direction every month, it is the best tool for managingthe economy in the short run.
China closely watches BHP's bid for Potash
China's
Ministry of Commerce
will closely watch the
BHP Billiton
's bid for
Potash Corporation
. According to China ministry spokesman Yao Jian the dealbetween the two big firms will draw global attention and impact China. Theministry will review BHP's bid for Potash if a formal application gets submitted.
REGULATORY NEWS
FDA delays AstraZeneca's drug Ticagrelor
AstraZeneca today announced that the U.S.
Food and Drug Administration
hasincreased the time span for the review of anti-clotting drug ticagrelor (trademarkname Brilinta). The FDA has delayed the Prescription Drug User Fee Act datefrom September 16 to December 16. AstraZeneca would continue to workclosely with the agency on this matter. Ticagrelor is under regulatory review innine territories around the world, including the EU, Canada and Brazil.
Uncomfortably high inflation at the moment: David
Bank of England
policymaker
David Miles
said that inflation is uncomfortablyhigh at the moment. The BoE wants further loosening of the monetary policy, if recovering economy falters but high inflation has led one policymaker,
AndrewSentance
, to vote for a rise in interest rates from a record low of 0.5 percent.
Green growth may boost U.K. economy
Britain's plan on new low-carbon programme for the development of wind farmsand promotion of green jobs will lead to the growth of the economy by 1.5 to 2percent, according to the energy and climate minister. Investment to build windturbines and green deal to insulate homes will offset the fiscal tightening. Nextmonth government will provide details of austerity measures with many depart-ments to help cut a record budget deficit of 11 percent of GDP.
EU sets news rules for short-selling
European Union has set out new rules to curb short-selling as it tries to tighten
its grip on the activities it partly blames for aggravating the Eurozone‟s financial
crisis. In future, firms will have to tell EU regulators about significant short posi-tions in any stock or European government bond, while authorities will have thepower to temporarily ban short selling in exceptional circumstances. Naked short-selling will face even tighter rules. Greater disclosure will also be required forfirms that short European sovereign bonds, with a requirement to give details of positions in bonds insurance or credit default swaps. The
European Commis-sion
today said it wants to create “a harmonised framework for coordinatedaction at the European level.” The Commission also said in future it will require
trades in over-the-counter derivatives to be reported with standard contractscleared through a central counterparty. The proposal mirrors new US guidelinesand is designed to enable regulators to measure counterparty risk and the expo-sure of firms at any one time.

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