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9/22/10 - The Economic Monitor UK Free Edition

9/22/10 - The Economic Monitor UK Free Edition

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- Stock recommendations and price targets from top brokerage firms
- Forecasts on Economic Indicators
- Important Events Scheduled on 23 September

Economic Events
- Society of Motor Manufacturers and Traders (SMMT) will release the data on U.K. monthly automotive production for August
- British Banking Association will release the statistical report on British Banking

Corporate Events
- Songbird Estates, Inditherm, Westminster Group interim results
- Group NBT final results

Breaking News
- Imperial cigarette volumes in line with expectations
- Xstrata secures credit facility, plans to raise funds
- House of Fraser sales growth soars
- Deutsche Bahn to run new ICE3 in London
- First Group appoints O'Toole as next CEO
- Severstal to list its gold unit in London - source
- BoE votes 8-1 to halt rates
- CBI predicts U.K. 2011 GDP to fall
- Bonds soar on speculation
- Clegg urges Democrat Party for support
- Britons need to save for retirement: Aviva
- Stock recommendations and price targets from top brokerage firms
- Forecasts on Economic Indicators
- Important Events Scheduled on 23 September

Economic Events
- Society of Motor Manufacturers and Traders (SMMT) will release the data on U.K. monthly automotive production for August
- British Banking Association will release the statistical report on British Banking

Corporate Events
- Songbird Estates, Inditherm, Westminster Group interim results
- Group NBT final results

Breaking News
- Imperial cigarette volumes in line with expectations
- Xstrata secures credit facility, plans to raise funds
- House of Fraser sales growth soars
- Deutsche Bahn to run new ICE3 in London
- First Group appoints O'Toole as next CEO
- Severstal to list its gold unit in London - source
- BoE votes 8-1 to halt rates
- CBI predicts U.K. 2011 GDP to fall
- Bonds soar on speculation
- Clegg urges Democrat Party for support
- Britons need to save for retirement: Aviva

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Published by: International Business Times on Sep 25, 2010
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09/24/2010

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22 September 2010
THE ECONOMIC MONITOR U.K.
The
FTSE 100
ended down 24.28 points or 0.4 percent at5,551.91, after falling 0.5 percent on Tuesday.
By 1002 GMT,
sterling
traded 0.4 percent higher on theday at $1.5670.
December gilt futures
hit a two-week high of 124.24. By1152 GMT, the contract was 145 ticks higher at 124.03,outperforming the December Bund contract by 35 ticks.
ICE Brent
for
November
fell 80 cents to $77.62.
Spot gold
was bid at $1,293.75 an ounce at 1357 GMT.
MARKETS AT A GLANCESTOCK INDICESCURRENCIES
INDEX LAST PRIOR 
Euro (EUR/USD)1.33781.3235U.K. Pound (GBP/USD)1.56181.5616Japanese Yen (USD/JPY)84.3785.10
All prices are at 11:29 AM EDT 
FUTURES
INDEX LAST CHNG % CHNG
FTSE 100* 5551.91-24.28 -0.44FTSE 250* 10448.33-96.74 -0.92FTSE 350* 2929.05-14.70 -0.50FTSE Tech Mark 100* 1923.43-19.37 -1.00FTSE AIM 100* 3550.5711.86 0.34FTSE All Share* 2865.02-14.30 -0.50FTSE Eurofirst 300* 1067.53-14.94 -1.38DAX* 6208.33-67.65 -1.08CAC 40* 3735.05-49.35 -1.30Stoxx Europe 50 2514.44-38.27 -1.50* CLOSING VALUES
LAST CHANGE
Crude Oil74.48 -0.49Natural Gas4.093 0.026Gold, Dec.1291.50 17.20Copper (¢), Dec356.90 8.80Wheat (¢), Dec.724.25 6.25
All prices are at 11:19 AM EDT 
Stock recommendations and price targets from topbrokerage firms
Forecasts on Economic Indicators
Important Events Scheduled on 23 September
Economic Events
Society of Motor Manufacturers and Traders
(SMMT)will release the data on U.K. monthly automotiveproduction for August
 
British Banking Association
will release the statisticalreport on British Banking
Corporate Events
Songbird Estates
,
Inditherm
,
Westminster Group
interimresults
Group NBT
final results
 
Breaking News
Imperial
cigarette volumes in line with expectations
Xstrata
secures credit facility, plans to raise funds
House of Fraser
sales growth soars
Deutsche
Bahn
to run new
ICE3
in London
First Group
appoints O'Toole as next CEO
Severstal
to list its gold unit in London - source
BoE
votes 8-1 to halt rates
CBI
predicts U.K. 2011 GDP to fall
Bonds soar on speculation
Clegg
urges Democrat Party for support
Britons need to save for retirement:
Aviva
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.
BROKERAGE/ ACTIONS RATINGGoldman Sachs
Magnit Cuts to neutral from buy NeutralPremier Oil Cuts to neutral from buy NeutralShire Adds to conviction buy list --
Jefferies
Admiral Group Cuts to hold from buy Hold
Altium
Burst Media Cuts target price to 5p from 6p HoldWilmington Raises target price to 179p from 162p Buy
Deutsche Bank 
Carillion Raises price target to 420p from 393p --
Investec
Carrs Milling Raises target price to 670p from 590p Buy
Evolution Securities
Gulf Keystone Cuts to neutral from add NeutralRobert Wiseman Cuts price target to 350p from 265p Neutral
UBS
Wellstream Raises price target to 800p from 500p NeutralXchanging Cut price target to 145p from 185p Neutral
Barclays
J Sainsbury Raises to equal weight from Equal weightTesco Raises to overweight from equal weight Overweight
FTSE 100
MARKET PERFORMANCE
A. Shares in
Imperial Tobacco
were higher after the cigarette maker said it ison track to meet forecasts. Miners were also strong, with gold miners
African Barrick 
and
Randgold Resources
setting the pace after theprecious metal hit another record. But index was lower overall, with insurerAviva at the bottom of the pile. FTSE 100 down 31 at 5,545.B. Miner
Xstrata
was now the best performer in the FTSE 100, helped bystronger commodity prices on the back of the weaker U.S. dollar. The onlynon-miner among the top 10 gainers was Imperial Tobacco. The
Lambert& Butler
maker said it is still on track to meet forecasts for the year,though growth in tobacco revenues has slowed slightly over the last sixmonths. Pumps maker Weir fell, just a couple of days after it made it intothe FTSE 100.
RBS
has changed its stance on the company’s shares from“buy” to “hold”, even though it has raised its target price from 1412p to
1567p. FTSE 100 down 20 at 5,556.C. Index was in positive territory now after a good start on Wall Street.
Miners
in demand as metal prices advance, moving in the opposite direction tothe dollar. Miner
Xstrata
was the top riser.
MARKET BRIEFING
 
The
U.K. indexes
declined on the growing speculation that the
Bank of England
may be forced to widen bond purchase and increase the assetpurchase program as worries over the economic recovery in the U.S. and lack of action taken by the Federal Reserve hit sentiment, offsetting gains inminers. Banks, which tend to be sensitive to even slight shifts in risk appetite, were the biggest drag on the index, with Lloyds Banking Group off 1.4percent and HSBC 1.0 percent weaker. The Confederation of British Industry lifted growth outlook for 2010. Mining companies rallied as copper andprecious metals edged higher. The FTSE 100 ended down 24.28 points or 0.4 percent at 5,551.91, after falling 0.5 percent on Tuesday.
Sterling
hit its weakest level against a currency basket in two months, dragged lower after it hit a near four-month trough against the euro. Trade-weighted sterling fell as low as 80.5, its lowest since late July, according to data kept by the Bank of England. In earlier trade, the euro had rallied to itshighest level versus the pound since late May. While sterling rose against the dollar as the U.S. currency faced broad selling pressure after the U.S.Federal Reserve suggested more monetary easing may be in the pipeline. By 1002 GMT, sterling traded 0.4 percent higher on the day at $1.5670, havingclimbed as high as $1.5716.
Gilts
 jumped, pushing yields back towards last month's record lows, after Bank of England minutes showed a greater willingness to consider furthermonetary stimulus. The minutes had resonance; coming hours after the Federal Reserve expressed concerns about slow growth and low inflation andsaid it was ready to provide more support to the U.S. economy. The yield on 10-year gilts fell 16 basis points to a two-week low of 2.95 percent, movingwithin sight of Augusts' all-time low of 2.79 percent and on track for its biggest one-day slide in more than a year. December gilt futures hit a two-weekhigh of 124.24, vaulting through key chart resistance at 124.19, the 62 percent retracement of the Aug-Sept sell-off. By 1152 GMT, the contract was 145ticks higher at 124.03, outperforming the December Bund contract by 35 ticks. In the cash market, the gap between 10-year gilt and Bund yieldsnarrowed to its lowest since the start of this year at 61 basis points.
Oil
fell below $75 a barrel, reversing earlier gains after government inventory data showed a rise in crude and oil product stocks. Still sluggish oil use inthe United States was highlighted by Energy Information Agency (EIA) data showing a rise in oil stocks, despite an outage on a pipeline carryingCanadian crude to the U.S. These figures confirmed industry data from the American Petroleum Institute (API) which painted a similar picture, leading oilprices lower on Tuesday. U.S. crude for November, the front-month contract after October went off the board on Tuesday, fell 57 cents to $74.40 by1514 GMT, well off an earlier high of $76.00. ICE Brent for November fell 80 cents to $77.62.
Gold
hit record highs for a fifth consecutive session after the Federal Reserve signaled it stood ready to inject fresh cash into the economy, knocking thedollar and whetting investor appetite for bullion. Spot gold hit a new record of $1,296.10 an ounce and was bid at $1,293.75 an ounce at 1357 GMT,showing a 0.6 percent gain on the day. U.S. gold futures rose $21.00 an ounce to $1,295.30, having hit a contract high at $1,298.00.
STOCK RECOMMENDATIONS BY BROKERAGE HOUSES
 
THE ECONOMIC MONITOR - U.K.
COMPANY NEWS
Imperial cigarette volumes in line with expectations
Imperial Tobacco
announced that its cigarette volume were in linewith its own expectation as it stood at 4.3 percent fall seen at its 9-
month as the company’s cigarette volumes fell 4.3 percent in July. The
world's No.4 cigarette groups said that its global key cigarette brandssustained to perform well with
Davidoff 
and
West
volumes growingand
Gauloises Blondes'
performance refining in the second half. Thecompany will report its annual results for the year to end-September onNov 2, 2010.
Xstrata secures credit facility, plans to raise funds
Xstrata
, Anglo-Swiss miner secured a $4billion revolving credit facility, which isexpected to replace its existing $5.5billion arrangement that wasoutstanding to mature October 2011.The new facility which was launched at$3 billion, increased significantly afterbeing oversubscribed and will equallysplit into a three and five year tranche. The company is planning to raiseover $5 billion into new mines and to focus on organic growth ratherthan acquisitions after, its first-half earnings per share on higher metalsprices doubled.
House of Fraser sales growth soars
House of Fraser
, British department store group reported a 22 percentrise in first-half core earnings on attributed to growing brand presence
and increasing online sales. The company’s earnings before interest, tax,
depreciation and amortization (EBITDA) stood at 13 million pounds($20.4 million) in the 26 weeks, while sales at stores open at least a year jumped 8.4 percent, and were up 10 percent in the first seven weeks of the second half. The company also said that it was all set to reduce itsnet debt/EBITDA ratio towards 2 times by January 2011.
Deutsche Bahn to run new ICE3 in London
Deutsche Bahn
is planning to run new ICE3 trains through the tunnelby 2013 in competition with
Eurostar Group
in London by 2013, as itsigns deal with
High Speed 1 Ltd.
This will connect London with theChannel Tunnel, paving the way for direct rail services between the U.K.and Germany. The company is also looking for authorization from theFrench and British governments to run passenger trains through the 30-mile subsea link operated by
Groupe Eurotunnel.
 
First Group appoints O'Toole as next CEO
Chief Executive
Moir Lockhead,
of 
FirstGroup
would retire next Marchafter 21 years at the helm, as
Tim O'Toole
will replace him later thisyear, the company said. Lockhead had led the group to transform intoone of Europe's largest bus and rail operators from an employee andmanagement buyout of 
Grampian Regional Transport
in 1989.O'Toole, who was Managing Director of London Underground earlierhad joined FirstGroup's board last year and has held the roles of Chief Operating Officer and Deputy Chief Executive.
Severstal to list its gold unit in London - source
Severstal ,
Russia's largest steel producer looks to list its gold unit inLondon in the fourth-quarter as this would help fund the unit's futureexpansion and take the business at $4 billion (2.6 billion pound) plus, aperson familiar with the matter said. He also said that the listing is beinghandled by sole sponsor
Morgan Stanley
, joined by joint global co-coordinator
Credit Suisse
, and joint bookrunner
Troika Dialog
. But all
ECONOMY NEWS
BoE votes 8-1 to halt rates
The
Bank of England Monetary Policy Committee
(MPC) voted 8-1in favour of keeping the BoE's key lending rate at 0.50 percent aftertheir meeting on September 8-9, freezing its borrowing costs at an all-time low for an 18th month running. For the continuous fourth months,
Andrew Sentance
voted to support a quarter-point hike to liftborrowing costs to 0.75 percent. He stated that the recovery indomestic demand over the past year indicates that the recovery willhave adequate momentum to endure the planned fiscal tightening.
CBI predicts U.K. 2011 GDP to fall
The U.K. economy growth forecasted for next year ispredicted to be slower as the biggest public spendingsqueeze since World War II is awaited, the
Confederation of British Industry
said. The U.K.’s
biggest business lobby also said that the
Bank of England
won’t raise interest rates until the second
quarter. The group expects the GDP to rise next yearby 2 percent, down from a forecast in June of 2.5percent. It also raised its 2010 growth forecast to 1.6percent from 1.3 percent.
Bonds soar on speculation
The news of 
Federal Reserve
prepared to do more to support theeconomy, soared U.K. government bonds, speculating that the
Bank of England
will ease monetary policy.
Ten-year gilt yields
dropped themost in more than a year after the Fed signaled it may restart purchasesof government debt with new money, a policy known as quantitativeeasing.
Clegg urges Democrat Party for support
Nick Clegg,
British Deputy Prime Minister insisted his Liberal
 
DemocratParty
 
this week to stand along with the coalition
government
with theConservatives for a full five years.
Lib Dems,
the junior partner in aConservative-led coalition will likely be pushed back to the margins of 
British politics if they don’t put their point strongly. "Expectations of a
massive punch-up here were overblown," said Andrew Hawkins of pollsters
ComRes.
 
CORPORATE RESULTS
COMPANY NAME EVENT
GoIndustry-DoveBid Interim 2010Inditherm Interim 2010S & U Interim 2010Scisys Interim 2010Songbird Estates Interim 2010Treveria Interim 2010Westminster Group Interim 2010Gleeson (M J) Group Final ResultsGroup NBT Final ResultsLuminar Group Trading AnnouncementMitchells & Butlers Trading AnnouncementUnited Utilities Group Trading Announcement
DATE - 23/September/2010

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