Closing Update 24th October 2016

UK and European shares headed for a three-week high as better-than-expected data added to
evidence of a pick-up in the regions economy, while Royal Philips NVs results boosted investors
optimism about earnings.
U.S. shares rose to a two-week high, beginning one of the earnings reporting seasons busiest weeks
as a flurry of deal activity spurred optimism in equity markets.
Microsoft is the latest company to raise its prices in Britain as a result of the fall in value of the pound
in the aftermath of 'Brexit'. The company's enterprise and cloud software will rise by as much as 22%
to adjust for the depreciating value of sterling since the June referendum.
Philips has seen third-quarter profits jump after posting strong sales in its health businesses. The firm
said net profit surged 18% year-on-year to 383m while sales edged up 1% to 5.9bn. It said it was
maintaining its forecasts for the full year as it expected to report a strong final quarter.
Burberry and Coach are not in active merger talks. "This is completely speculative. There are no
negotiations underway, Burberry is not talking to Coach," one of the sources said. Another source
with first-hand knowledge of the matter said such a plan could not be on the cards since the two
companies pursued very different strategies.
Inmarsat said it has signed a memorandum of understanding to appoint Honeywell Aerospace, a unit
of Honeywell International, as a distribution partner. Honeywell Aerospace will act as global
distribution partner for Inmarsat's SwiftBroadband-Safety aviation service, which will provide
broadband connectivity to cockpits and other parts of aircraft.
Petra Diamonds posted its unaudited trading update for the first quarter to 30th September, with
production up 30% year-on-year to 1,097,523 carats. The firm put that down to an to increased
contribution from undiluted ROM ore, improving ROM grades and additional tailings production from
Kimberley Ekapa Mining
Oil prices fell as Iraq said it wanted to be exempt from an OPEC deal to cut production, though losses
were capped by Iran saying it would encourage other members to join an output freeze.
Gold rose as the dollar retreated from an earlier near nine-month high, though uncertainty over the
timing of a U.S. interest rate hike kept prices hemmed in a range.
Market Close - 4:35pm
Market Index Change % Change
UK 100 6,993.55 -26.92 -0.4%
UK 250 17,854.90 -79.34 -0.4%
GER 30 10,770.68 +59.95 +0.6%
FRA 40 4,555.75 +19.68 +0.4%
OIL (BRENT) 51.20 -0.58 -1.1%
GOLD 1,262.85 -3.61 -0.3%

UK Major Risers & Fallers - 4:35pm

Company Price Change % Change
Petra Diamonds 147.45 +7.9 +5.7%
Provident Financial 3092 +87 +2.9%
DCC 6700 +120 +1.8%
Cobham 139.7 -20.9 -13.0%
Hikma 1851 -56 -2.9%
Randgold Resources 6985 -170 -2.4%
Reported Economic Data
Time/Date Previous Forecast Outcome
9:00am: Europe Flash Manafacturing PMI 52.6 52.7 53.3
9:00am: Europe Flash Services PMI 52.2 52.4 53.5
11:00am: UK CBI Industrial Order Expectations -5 -2 -17
Interbank Spot FX Rates - 4:35pm
Pairing Rate % Change
GBP/USD 1.2204 -0.25%
EUR/USD 1.0881 -0.03%
GBP/EUR 1.1217 -0.20%
USD/JPY 104.2900 +0.47%
USD/CHF 0.9931 -0.06%
GBP/JPY 127.2680 +0.21%
Three small cap stocks set to bounce back
 By Richard Gill
There is an old stock market saying that profit warnings come in threes. For investors this implies that
any company which first announces such a warning should be avoided for some time. In other words,
never attempt to catch a falling knife. But like many such clichs it is often wrong.
Profit warnings can occur for a whole host of different reasons, whether it be a one-off hit to trading,
wider issues in the sector or more ingrained problems within a particular business. In the latter case
that means bad news can take time to filter through, and yes an initial warning may be followed by
several others. For example, Tesco had four profit warnings in 2015, and Rolls-Royce has announced
five within the space of 20 months.
But it is interesting to note that most profit warnings are actually a one time event.
A study in 2009 by researchers Elayen and Pukthuanthong found that out of 3,667 profit warnings
issued by US companies 65% were a one-off, with only 12% of companies issuing three or more
warnings in a row. Another study, this time on UK companies, by James Montier, found that
companies which issued profit warnings fell by 16.6% on average on the day of the announcement.
However, if you bought a year after the warning was issued you could do very well indeed, with
stocks in his sample group outperforming the market by 22.4% over the next year...
The Master Investor Market Report
The FTSE 100 closed the day at 6,986.40, a decrease of 34.07 points.
The FTSE 250 fell 73.72 points to finish at 17,860.52.
The FTSE All Share dropped 17.32 points to finish at 3,793.87.
The FTSE AIM All Share ended the day at 825.38.
Shares in FTSE 250 defense manufacturer Cobham (COB) plunged 13% to 139.70p after the company
cut its full year trading profit forecast to between 255 and 275 million after a disappointing 3rd
quarter. Management said that conditions had been challenging, with particularly weak demand in
the SATCOM and Wireless business units while the Integrated Electronics division also struggled.
Check out our brand-new October issue! Click HERE to read.
Online CFD specialist Plus500 (PLUS) saw its revenues drop during the third quarter of the year, but
management said that the business remained on track to hit its full year targets. Revenues for the
three months were 4% below the same period of 2015 despite a 33% increase in customer numbers.
Shares in the company fell by 45.50p to 624.50p.
Shares in AIM-listed data service provider Fusionex International (FXI) surged 15.71% to 202.50p
after the company announced that EBITDA would be significantly ahead of current market
expectations following the launch of its new product line in June. The current sales pipeline is strong
and includes small and medium sized enterprises on top of the firm's existing blue chip clients.
Tomorrow's news today
BP (BP.) will publish third quarter results.
Quote of the day "Nine-tenths of wisdom is being wise in time." - Theodore Roosevelt