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THE ECONOMIC MONITOR U.K.
INSIDE THE REPORT
MARKETS AT A GLANCE
Stock recommendations and price targets from top brokerage firms Forecasts on Economic Indicators Important Events Scheduled on 19, 20 September
The FTSE 100 Index declined 31.69, or 0.57 percent, to 5,508.45 as of, cutting this week’s rally to 0.4 percent. By 1434 GMT, sterling was at $1.5628, up 0.1 percent on the day but well below an earlier 5-week high of $1.5730. At 1315 GMT the December gilt future was 30 ticks up on the day at 122.64. At 1507 GMT, ICE Brent for November fell 40 cents to $78.08. October Brent expired on Wednesday. Spot gold hit an all-time high of $1,282.75 a troy ounce before easing to a bid at $1,276.50 by 1215 GMT.
Parliamentary election in Sweden on Sep 19. IAEA General Conference 54th session in Austria European Medicines Agency (EMA) expert committee to review the drug's safety
INDEX FTSE 100* FTSE 250* FTSE 350* FTSE Tech Mark 100* FTSE AIM 100* FTSE All Share* FTSE Eurofirst 300* DAX* CAC 40* Stoxx Europe 50 * CLOSING VALUES LAST 5508.45 10440.98 2908.87 1933.40 3498.17 2850.47 1074.00 6209.76 3722.02 2537.23 CHNG -31.69 -1.14 -14.54 5.57 41.80 -8.75 -1.90 -39.89 -14.28 -15.98 % CHNG -0.57 -0.01 -0.50 0.29 1.21 -0.31 -0.18 -0.64 -0.38 -0.63
Allergy Therapeutics, Goldplat, Petra Diamonds final results
Centrica raises its stake in Statfjord field RBS partners with Chinese firm 3i’s buyout chief leaves the company Domino FY 10 sales Mitchells & Butlers agrees to buy Ha Ha Bar Cosalt revenue falls Caledon receives unsolicited offers Cable comments on migrant limits Immigration limits hurt economy: Minister OFT initiates price-fixing probe against truck makers "Credit" easing a last resort: Posen U.S. EPA investigates release of benzene at BP refinery
INDEX Euro (EUR/USD) U.K. Pound (GBP/USD) Japanese Yen (USD/JPY) LAST 1.3039 1.5631 85.77 PRIOR 1.3079 1.5629 85.84
All prices are at 11:34 AM EDT
LAST Crude Oil Natural Gas Gold, Dec. Copper (¢), Dec Wheat (¢), Dec. 73.71 4.184 1277.7 351.85 730.75 CHANGE -0.86 -0.054 3.90 2.50 11.50
All prices are at 11:24 AM EDT
THE ECONOMIC MONITOR - U.K.
STOCK RECOMMENDATIONS BY BROKERAGE HOUSES
BROKERAGE/COMPANY Citigroup Bluebay Standard Chartered Hargreaves Lansdown Exane BNP Paribas Associated British Foods Numis Anite Bluebay Toluna United Business Media Goldman Sachs Barratt Developments Bellway Bovis Homes Persimmon Redrow Taylor Wimpey UBS GlaxoSmithKline J Sainsbury Investec International Quantum Epitaxy Natixis Kingfisher Altium Oxford Instruments United Business Media KBC Peel Hunt RAB Capital Panmure United Business Media HSBC BHP Billiton Cuts to neutral from overweight Neutral Raises price target to 750p from 650p Buy Cuts to hold from buy Hold Raises price target to 498p from 384p Raises price target to 735p from 655p Buy Buy Raises price target to 272p from 257p Buy Raises price target to 37p from 27p Buy Raises price target to 1650p from 1525p Raises to buy from neutral -Buy Cuts to neutral from buy Raises to buy from neutral Raises price target to 467p from 458p Cuts price target to 500p from 520p Raises to neutral from sell Cuts price target to 42p from 55p Neutral Buy --Neutral -Cuts to hold from add Raises price target to 370p from 340p Recommends price target of 374p Raises price target to 657p from 638p Hold Add Buy Hold Cuts to neutral from outperform Neutral Raises price target to 370p from 340p Raises price target to 2250p from 2100p Raises to buy from hold -Buy Buy ACTIONS RATING
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.
A. Index was sitting just below 5,600 points after a strong advance in early trading. Miners Kazakhmys, Vedanta and Antofagasta were going well, but it was engineer Invensys that led the way after becoming the exclusive supplier of railway signalling to Chinese rolling stock maker CSR Corporation. FTSE 100 up 55 at 5,596. Only seven stocks were in the red as index resumes its rally after pausing for breath for a few days. Invensys was the day’s top riser. FTSE 100 up 55 at 5,596. Index gave up most of its early gains despite a stronger start on Wall Street. Among the risers were engineer Invensys. Aggreko, Cable & Wireless Worldwide, Kingfisher, and Sainsbury. FTSE 100 up 12 at 5,553.
THE ECONOMIC MONITOR - U.K.
COMPANY NEWS COMPANY NEWS (contd...)
also weak sales of its work wear equipment. The company remains confident of its future prospects in the long term.
Centrica raises its stake in Statfjord field
Natural gas company Centrica, in its strategy to grow and deliver value from upstream business today announced that it has signed a deal with A/S Norske Shell and Enterprise Oil Norge for buying its nonoperated interests in the Statfjord field in the Norwegian sector of the North Sea. Centrica will pay 1.37 billion Norwegian kroner ($225 million) for the 9.44% equity stake in the field, taking its total stake to 19.13%.
Caledon receives unsolicited offers
Caledon Resources said it was in preliminary talks and has been approached with an offer. The company, whose key shareholder Polo Resources had dropped its offer earlier this year, in August said it was no longer in an offer period. The company has seen several unsolicited third-party interest in its business after it engaged RBC Capital Markets to conduct a strategic review in February last year.
RBS partners with Chinese firm: Sources
Royal Bank of Scotland Group is said to have signed an agreement with Chinese group Guolian Securities, to start a venture to manage stock sales in China, according to sources. RBS has signed a MOU and applied to the China Securities Regulatory Commission for approval. RBS, based in Edinburgh, would hold 33 percent of the venture. (See Special Report)
Immigration limits hurt economy: Minister
Business Secretary Vince Cable said that Cameron's Conservatives' decision in May on cutting immigrations resulting to a loss of thousands of jobs in investment banking, engineering and pharmaceuticals and hurting its economic recovery. Due to the limits, the Companies are moving jobs to overseas as they are unable to hire key staff. Cable reluctantly agreed to back an immigration cap as part of a coalition deal.
3i’s buyout chief leaves the company
Private equity firm 3i Group disclosed its Buyout head Jonathan Russell, who had been with the firm for 24 years, would leave as the company announces that it will combine two of its key divisions. The company’s buyout team will be combined with its Growth Capital division. The company said the two divisions would now be run as a single private equity unit with a regional approach to investment decisions. Main divisions will be Private Equity and Infrastructure. Russel, was responsible for over 5 billion Euros ($6.5 billion) worth of funds.
OFT initiates price-fixing probe against truck makers
The UK's Office of Fair Trading (OFT) contacted leading truck makers including Scania, Daimler and MAN as part of a probe into suspected cartel activity. A Daimler spokesman said the company has been cooperating with the investigation. The OFT said investigations are at an early stage and it had not yet determined whether the law was violated or not. Under OFT rules, companies involved in price-fixing can be fined up to 10 percent of their annual turnover and executives will be prosecuted and sentenced to an imprisonment of five years.
Domino FY 10 sales ahead of expectations
Domino Printing Sciences reported an increase of 20 percent in revenue so far in the second half, boosted by strong demand in Asia, Middle East and South America. The company also said it is ahead of its expectations for fiscal 2010 and remains cautious on its outlook for Western Europe and North America. For the period ended September 16, like-for-like sales rose 16 percent. For the 10 months at the end of August, revenue increased 18 percent. Net cash stood at 38.0 million pounds at August-end. Analysts on average expect a pretax profit of 46.6 million pounds ($72.8 million) on revenue of 289.3 million pounds for fiscal 2010.
"Credit" easing a last resort: Posen
The Bank of England might aim to slash borrowing costs in specific areas of the economy since its program of buying government securities prove ineffective in stimulating economic growth, said Adam Posen, BoE Monetary Policy Committee member. If necessary, the Bank's next step would be to shift into "heavy-duty credit easing," which is targeting specific sectors such as the US did with housing markets.
Mitchells & Butlers agrees to buy Ha Ha Bar
U.K. pubs and restaurants group Mitchells & Butlers has approved acquisition of restaurant chain Ha Ha Bar & Grill for 19.5 million pounds ($30.4 million). The deal will generate an EBITDA return of 25 percent after a capital expenditure of 8.5 million pounds. The Ha Ha Bar and Grill restaurants is being sold by Bay Restaurant Group and will be converted into All Bar One sites, Browns restaurants and other M&B brands.
U.S. EPA investigates release of benzene at BP refinery
The Environmental Protection Agency said it has started an investigation into the release of benzene at BP's Texas City, Texas refinery earlier this year. EPA has requested BP to provide information regarding the release of chemicals like benzene at the plant between April 6 and May 16.
Cosalt revenue falls on weak sales,
Cosalt, which provides safety equipment and services for the offshore oil & gas and marine industries, today announced fall in revenues by 9 percent for the period from May to August. Group’s revenue for the period was at 32.5 million pounds ($50.78 million), compared with 35.7 million pounds last year. The marine safety group attributed the fall in revenues to reduction in clients spending in the North Sea division that affected its volume and
THE ECONOMIC MONITOR - U.K.
ECONOMY NEWS ECONOMIC INDICATOR WATCH (contd…)
Debt risk a greatest threat to Europe: FM
British finance minister George Osborne said that the greatest threat to European economies was a return of sovereign debt risk and that voters in Britain understood the need to slash state spending. The British chancellor said Britain wanted to be an active member of the European Union but it would fall primarily to the euro zone to aid any of its members in financial difficulty. With trade unions in Britain warning the public would not accept unfair welfare cuts, Osborne said the welfare state had become a way of life for a minority of Britons.
CML Market Commentary (September)
Council of Mortgage Lenders will provide market Commentary for the analysis on the U.K. mortgage markets for the month of September at Local/GMT/ET 1230/1130/0730.
BoE Trends in Lending report (September)
Bank of England will publish its report on latest trends in lending to the U.K. economy at Local/GMT/ET 0930/0830/0430.
Job boost at London financial
According to a survey from financial recruitment company Astbury Marsden the London financial sector enjoyed a rise in the number of jobs created last month. Astbury Marsden said the number of new City job vacancies created in August increased 7 percent month-on-month to 5,031. Astbury Marsden chief operating officer Mark Cameron said, "Banks are also looking at other parts of the market, like mortgage-backed securities, that had been dormant but seem to be flickering to life."
BoE Quarterly Bulletin (Q3)
Bank of England will release its quarterly bulletin for the third quarter at Local/ GMT/ET 0001/2301/1901. The Quarterly Bulletin provides regular commentary on market developments and U.K monetary policy operations.
DATE - 20/September/2010
COMPANY NAME EVENT
ECONOMIC INDICATOR WATCH
Monday, September 20, 2010
Dods Ecommerce Alliance TEG Group Lighthouse Group Petrel Resources Deltex Medical Group MAM Software Group I S Solutions Silence Therapeutics BTG Homeserve Energiser Investments Allergy Therapeutics Cascal TUI Travel Energetix Group Borders & Southern Petroleum Ceres Power Holdings
(Tentative) Interim 2010 (Tentative) Q2 2010 Interim 2010 Interim 2010 (Tentative) Interim 2010 (Tentative) Interim 2010 (Tentative) Q4 2010 Interim 2010 Interim 2010 (Tentative) Q2 2010 (Tentative) Trading Update (Tentative) Interim 2010 Preliminary 2010 (Tentative) Q1 2011 (Tentative) Pre-Close Trading Statement (Tentative) Interim 2010 (Tentative) Interim 2010 (Tentative) Preliminary 2010
Rightmove Monthly House Price Index (September)
Rightmove will announce figures for monthly house price index for the month of September at Local/GMT/ET 0001/2301/1901. The index monitors changes in house prices both annually and monthly, and provides view on the current state of the property market in England and Wales. Rightmove in August reported a fall of 1.7 percent (£4,091) in average asking price across the 117,000 new properties added. It was the biggest reduction in asking prices measured by Rightmove so far this year, after falling 0.6 percent in July.
CML mortgage lending figures (August)
Council of Mortgage Lenders will release its mortgage lending figures for the month of August at Local/GMT/ET 0930/0830/0430. Survey by CML revealed mortgage lending remained weak in July. There were 56,000 loans for house purchase (worth £8.4 billion) advanced in July, up from 52,000 (worth £7.7 billion) in June, and from 53,000 (worth £7.3 billion) a year ago. The 28,000 remortgage loans (worth £3.5 billion) were unchanged from June and down from 40,000 (worth £4.9 billion) in July 2009.
BoE capital issuance (August)
Bank of England will release its capital issuance data for the month of August at Local/GMT/ET 0930/0830/0430. Gross capital issues by U.K. residents totalled £49.0 billion in July 2010, £8.8 billion higher than in June. Net capital issuance by U.K. residents totalled £5.7 billion in July 2010, £20.6 billion higher than in June.
DATE MON 09/20 TUE 09/21 LST 1400 1400 1400 INDICATOR Money Supply M4 PSNB, mm GBP PSNCR, mm GBP MPC Vote Outcome MPC QE Vote Outcome F’CAST N/A N/A N/A N/A N/A PRIOR 0.4 % 3.17bln -4.13bln 8-1 9-0
BOE broad money provisional estimates (August)
Bank of England will release provisional estimates of broad money (M4) and credit (M4 Lending) for the month of August at Local/GMT/ET 0930/0830/0430. Seasonally adjusted provisional figures for July was increased by £9.4 billion (0.4%), compared with an average monthly increase for the previous six months of £2.0 billion. The twelve-month growth rate fell, to 2.3% from 3.1% in June. M4 lending decreased by £11.6 billion (0.4%) in July. The twelve-month growth rate fell to 1.6% from 2.3% in June.
THE ECONOMIC MONITOR - U.K.
NEXT TRADING DAY
U.K. stocks declined, ending the FTSE 100’s weekly rally, as concerns of Eurozone worries resurfaced and as confidence was stung by data showing U.S consumer sentiment fell to its lowest level in more than a year, and with banks lower on renewed worries over the euro zone's fiscal health. The pan-European FTSEurofirst 300 of top shares closed 0.18 percent lower at 1,074.00 points, ending at its lowest closing level in more than a week. The FTSE 100 Index declined 31.69, or 0.57 percent, to 5,508.45 as of, cutting this week’s rally to 0.4 percent. Aggreko was the best performer after Credit Suisse started covering the back-up generator firm with a neutral recommendation. Invensys has become the exclusive supplier of railway signalling to Chinese rolling stock maker CSR Corporation. High copper prices boosted Kazakhmys and Vedanta Resources. While, financials dominate the fallers with Man Group the worst performer. Sterling cut gains against the dollar, coming off an earlier five-week high as renewed euro zone sovereign banking sector concerns put riskier currencies and equities back under pressure. As worries about peripheral euro zone countries resurfaced, the euro turned lower against the dollar, prompting other riskier currencies, including sterling, to follow suit, and pushing equities off their highs. The euro fell below a seven -week high against the pound hit on Thursday just above 84.00 pence. By 1434 GMT, sterling was at $1.5628, up 0.1 percent on the day but well below an earlier 5-week high of $1.5730 when the dollar fell broadly and traders reported sterling/dollar demand from Asian sovereigns and a U.S. bank. The euro was down 0.4 percent at 83.32 pence, pulling away from the 83.60 pence level, where traders reported an options expiry, and dipping below its 100-day moving average at 83.50 pence. British gilt futures rallied, receiving a modest boost from renewed investor jitters over Irish government debt and weaker-than-expected U.S. core inflation data, but they markedly underperformed Bunds. At 1315 GMT the December gilt future was 30 ticks up on the day at 122.64, reversing earlier losses while Bund futures surged as the cost of insuring against Irish default hit a record high. Gilt futures hit a session high of 122.83 after the release of U.S. data which showed an unexpected slowdown in the monthly rate of core consumer price inflation to 0.0 percent in August from July's 0.1 percent. However, gilts (Treasuries) continued to underperform Bunds on the day as they were lesser beneficiaries of Ireland's woes. The December gilt future trailed the equivalent Bund by 40 ticks, and the 10-year gilt/Bund yield spread widened 4 basis points on the day to a one-week high of more than 70 basis points. U.S. crude futures lost further ground, after a poll showed consumer sentiment soured this month against expectations for a slight improvement from August, stoking more worries about oil demand. The Thomson Reuters/University of Michigan Surveys of Consumers showed consumer sentiment fell to 66.6 from 68.9 in the final August reading, according to a report released earlier on Friday. The sentiment data pushed the dollar higher and U.S. equities lower. On the New York Mercantile Exchange at 1439 GMT, October crude was down 88 cents, or 1.18 percent, to $73.69 a barrel, after falling as low as $73.48. It hit a high of $75.25 earlier. At 1507 GMT, ICE Brent for November fell 40 cents to $78.08. October Brent expired on Wednesday. Gold retreated from record highs, as a firmer dollar tempered the momentum, although concerns about further quantitative easing in the United States cushioned prices. Sister-metal silver was supercharged, benefiting also from gains in prices for industrial metals to test the $21 mark. A break above $21.24 would open the way for prices to hit levels last seen in October 1980. Spot gold hit an all-time high of $1,282.75 a troy ounce before easing to a bid at $1,276.50 by 1215 GMT, compared with $1,272.20 late in New York on Thursday. It has gained more than $100 or 8.4 percent since the start of August.
Parliamentary election in Sweden on Sep 19.
Unlike the other parliamentary democracies of Europe, Sweden has regularlyscheduled dates for its general elections – they are held on the third Sunday in September every four years. On September 19, 2010, all 349 seats in the unicameral Riksdag are up for election, as are all town and county council seats around the country. Voters are allowed to submit postal ballots beginning on September 1, but can decide to void their postal ballot by appearing in person at their voting station on Election Day. The total electorate amounts to 7,000,000 voters, and turnout has averaged around 80 percent for the last 60 years, although has trended slightly lower since hitting a high of 91.76 percent in 1976.
IAEA General Conference 54th session in Austria
The provisional agenda of the conference includes election of officers and appointment of the general committee, applications for membership of the agency, message from the Secretary-General of the United Nations, general debate and Annual Report for 2009, election of members to the board of governors and many other. It will also focus on measures to strengthen international cooperation in nuclear, radiation, transport and waste safety, implementation of the NPT safeguards agreement between the agency and the democratic People’s Republic of Korea and application of IAEA safeguards in the Middle East European Medicines Agency (EMA) expert committee is all set to review the drug's safety before finalising its position at its next scheduled meeting (to Sept. 23).
Allergy Therapeutics, a pharmaceutical company is expected to release its final result. Company’s full year revenue is expected to increase to £41.36 million, as compared to £38.55 million in the previous year. Net debt is expected at £2.43 million. Analysts expect a full year loss (pre-amortization) to be at £0.5 per share. Goldplat, a previous metal producer company is expected to declare its final results at a profit at £1.1 per share. Company’s full year revenue is also expected to rise to £11.68 million as compared to £10.3 million a year ago. Net debt and capital expenditure is expected at £0.9 million and £1.1 million respectively. Petra Diamonds, an international diamond mining group is expected to declare its final results. Analysts expect company’s full year profit to be at £0.084 per share, as compared to a previous loss of £0.5 per share. Company’s full year revenue is expected to rise steeply to £158.88 million in the current year, from £69.1 million in the previous year. Net debt will be at £27.65 million, while capital expenditure at £70.13 million.
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