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23 September 2010

THE ECONOMIC MONITOR U.K.
Free Edition

INSIDE THE REPORT

MARKETS AT A GLANCE

Stock recommendations and price targets from top brokerage firms Forecasts on Economic Indicators Important Events Scheduled on 24 September

European shares fell on Thursday, though off their lows after U.S. existing home sales data rose from a 13-year trough. FTSE 100 closed at 5547.08. Against the dollar sterling was up slightly at $1.5669. UK gilt futures extended gains by around 15 ticks following a rise in U.S. Treasury prices. On the New York Mercantile Exchange, November crude rose 36 cents, or 0.48 percent, to $75.07 a barrel at 11:37 a.m. EDT. Gold bid at $1,293.25 an ounce at 1515 GMT. STOCK INDICES

Economic Events
No economic events scheduled

Corporate Events

Bond International Software, Dillistone, Tawa, Mission Marketing Group interim results

Breaking News

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 5,547.08 10,426.02 2,926.02 1,925.06 3,536.27 2,862.45 1,065.00 6184.71 3710.61 2515.43

CHNG -4.83 -22.31 -3.03 1.63 -14.30 -2.57 -1.46 -23.62 -24.44 0.99

% CHNG -0.09 -0.21 -0.10 0.08 -0.40 -0.09 -0.14 -0.38 -0.65 0.04

BA-Iberia merger clears all hurdles Songbird NAV soars Mitchells & Butlers food sales surge Nightclub operator Luminar sales drop AstraZeneca pill waits for approval Churchill confirms its coal project feasibility Inflation risks must ease: Dale British August car output rises - SMMT August mortgage approvals slump: BBA U.K. offshore wind beats global capacity More funds needs to be written off: HMRC

CURRENCIES
INDEX Euro (EUR/USD) U.K. Pound (GBP/USD) Japanese Yen (USD/JPY) LAST 1.3348 1.5721 84.31 PRIOR 1.3393 1.5668 84.55

All prices are at 11:29 AM EDT

FUTURES
LAST Crude Oil Natural Gas Gold, Dec. Copper (¢), Dec Wheat (¢), Dec. 75.11 4.16 1294.8 358.85 705.5 CHANGE 0.4 0.064 2.7 2.35 -14.25

All prices are at 11:19 AM EDT

THE ECONOMIC MONITOR - U.K.
STOCK RECOMMENDATIONS BY BROKERAGE HOUSES
BROKERAGE/COMPANY Deutsche Bank Croda Victrex Arden Partners Halfords Group Citigroup Henderson Wellstream JP Morgan John Wood Group Canaccord Genuity K3 Business Technology Group Nautical Petroleum Evolution James Fisher Nautical Petroleum Panmure McBride Rentokil Initial Seymour Pierce Penna Arden Partners S & U Stores SocGen Antofagasta BHP Billiton Xstrata Exane BNP Paribas AstraZeneca GlaxoSmithKline Shire Cuts to underperform from neutral Raises to neutral from underperform Cuts to underperform from neutral Underperform Neutral Underperform Cuts to sell from hold Cuts price target to 2,000p from 2,100p Cuts to hold from buy Sell Hold Hold Recommends price target of 620p Buy Raises to hold from underperform Hold Cuts to hold from buy Cuts target price to 120p from 148p Hold Buy Raises price target to 585p from 500p Raises price target to 420p from 350p --Raises price target to 215p from 180p Raises target price to 465p from 337p Buy Buy Raises to overweight from neutral Overweight Cuts to hold from buy Cuts to hold from buy Hold Hold Cuts price target to 550p from 650p Buy Raises price target to 1660p from 1420p Raises price target to 950p from 900p --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.

MARKET PERFORMANCE

FTSE 100
A. Gold was in focus as Randgold Resources, which mines for the precious metal in Africa but the market took a dramatic downward turn and moved to red after Lloyds Banking Group fell heavily. The intense turnaround was with recent volatility following uncertain comments from the US Federal Reserve on economic prospects. Imperial Tobacco showed second day gains after yesterday rising on the back of a positive update. However, it seems to be the Lambert & Butler maker's defensive qualities that were in demand today; shares were lower overall with the FTSE 100 firmly in the red. FTSE 100 down 48 at 5,504. An unexpected rise in unemployment in the US was the latest bad news to jangle traders' nerves. Miners, dependent on the health of the world economy, were among the heaviest fallers, with Kazakhmys leading the mining sector - and the FTSE 100 - lower. FTSE 100 down 71 at 5,480.

B.

C.

THE ECONOMIC MONITOR - U.K.
COMPANY NEWS ECONOMY NEWS

BA-Iberia merger clears all hurdles
The last and major hindrance between British Airways and Iberia over the planned £5bn merger has been removed. The target to create the world's third biggest airline is all set after the Spanish carrier approved BA's plan to tackle its £3.7bn pension deficit. The tieup between BA and Iberia, which was approved in April and has EU clearance, still requires shareholder approval by November. After the deal, BA shareholders are expected to own 56% of the combined company, to be called International Airlines Group. They also plan to launch a joint transatlantic business with AMR Corp's American Airlines this autumn.

Inflation risks must ease: Dale
Bank of England's Monetary Policy Committee debate continues as policy-makers struggle to assess the relative strength of upside and downside risks to inflation, BoE chief economist Spencer Dale. He clearly said in his speech at Cardiff Business School that he was is in no hurry to change monetary policy from its current ultra-loose setting, but confirmed that BoE will act if necessary. (See Analysis and Views)

British August car output rises - SMMT
British August car production was up 37.3 percent as compared to the previous year, while year-to-date output was up by an annual 41.3 percent, the Society of Motor Manufacturers and Traders said. Carmakers turned out 77,882 vehicles in August, while approximately 57,005 were destined for export, a rise of 51.8 percent on the year, SMMT stated. Commercial vehicle output also jumped 22.1 percent on the year and engine production was 15.4 percent higher.

Songbird NAV soars
Songbird Estates reported a 6 percent hike in net asset value as the demand for offices across the estate held firm against Britain's feeble economic outlook. The market value of its investment portfolio jumped to 4.8 billion pounds ($7.52 billion) in the half-year to end-June, reflecting adjusted NAV of 178 pence a share. The company has also proposed a fully underwritten, 140 million pounds open offer of new ordinary shares to finance the repurchase of a 135 million pounds shareholder.

August mortgage approvals slump: BBA
The data from major banks showed that the number of loans approved for buying homes fell in August to its lowest as the housing market is yet to cope with the crisis. The mortgage approvals fell 22.3 percent on the year in August to 31,767, down from 34,219 in July and the lowest since April 2009, as said by British Bankers' Association. Bank of England data released also showed home loan approvals by the country's six biggest banks were also their lowest since April 2009. Recent surveys show house prices are now falling and may further decline.

Mitchells & Butlers food sales surge
Mitchells & Butlers, Britain's biggest pubs and restaurants group announced that its sales at outlets open for more than a year increased by 4.4 percent driven by a surge in demand for food. The company sales of food increased 7.1 percent in the nine weeks to Sept. 18, with drink sales up 2.2 percent. The company which is re-shaping itself into a food-led business said it expected its operating margin to be about 16.5 percent, 1.2 percentage points higher than last year.

U.K. offshore wind beats global capacity
Britain's offshore wind capacity surpasses global capacity after the largest offshore wind park came into operation off the coast of Kent. Compared with 1,100 MW installed in the rest of the world, the UK's total offshore capacity climbs to 1,341 megawatt (MW), as per the statistics published by RenewableUK, Britain's wind and marine renewables industries association. The opening of the Thanet wind farm also pushed Britain's installed renewable energy capacity to a fivegigawatt (GW), while Swedish utility Vattenfall's, Thanet offshore wind farm added another 300 MW.

Nightclub operator Luminar sales drop
Luminar, a struggling British nightclub operator sales dropped as trading remained challenging. The company’s sales at its 76 clubs were down 20.2 percent in the 26 weeks to Aug. 26 with admission revenue down by 26.5 percent and customer numbers down 19.1 percent. The company has suffered from rising unemployment within its key 18-24 customer age group.

AstraZeneca pill waits for approval
An AstraZeneca pill has submitted for regulatory approval as a treatment for thyroid cancer, offering the drugmaker a smaller sales opportunity. The company failed last year in treating lung cancer. AstraZeneca said that the agency will make a decision by Jan. 7, 2011, as FDA has granted priority review status. It also stated that the U.S. Food and Drug Administration and the European Medicines Agency had accepted submissions for vandetanib.

REGULATORY NEWS

Need to write-off more funds: HMRC
HM Revenue and Customs will writes off approximately £1.5bn of unpaid tax after tax miscalculations. HMRC is manually dealing with the backlog of 7.5m cases because the discrepancies date are far back. Some of the cases involve overpayment estimated at a total of £3bn which will reimbursed. HMRC had earlier admitted six million other cases of incorrect tax, with 1.4m Britons who underpaid expected to receive an average demand for payment of £1,428. The taxpayers owe £300 or less.

Churchill confirms its coal project feasibility
Churchill Mining announced that a study at its East Kutai project in Indonesia 'confirms the technical and economic feasibility of the project and demonstrates that it is a world-class thermal coal deposit. This investment evaluation suggest that the project has a net present value of $1.8bn, and expects the pre-tax net cash flow to be in excess of $500m (£319m) in the first 20 years of production. The company is optimistic about its project to feed growing demand for energy in India and China.

ECONOMIC INDICATOR WATCH
No major indicators scheduled for the release.

THE ECONOMIC MONITOR - U.K.
NEXT TRADING DAY MARKET BRIEFING (contd…) ConocoPhillips' New Jersey refinery was undergoing major maintenance and also helped by Wall Street paring its losses and moving higher. On the New York Mercantile Exchange, November crude rose 36 cents, or 0.48 percent, to $75.07 a barrel at 11:37 a.m. EDT (1537 GMT), trading from $73.58 to $75.28.

Economic Events
No economic event scheduled

Corporate Events
Bond International Software, engaged in the provision of software, hardware and related support services, principally to the recruitment industry will declare interim results. The company is expected to report full year profit of £2.10 per share, up from £0.52 reported a year ago. Analysts expect the company to report a full year revenue of £31.900 million, higher from £32.54 million reported a year ago. Dillistone, a U.K. based company engaged in the sale of computer software and the provision of related support services will announce its interim results. The company is expected to report a full year profit of £14.90 per share, up from £14.68 reported a year ago. Analysts expect the company to report a full year revenue of £3.80 million, higher from £3.66 million reported a year ago. Tawa, which operates in Underwriting run-off, Run-off management services and Other corporate activities, will declare interim results. The company is expected to report a full year profit of £0.064 per share, down from £2.352 reported a year ago. Analysts expect the company to report a full year revenue of £22.75 million, higher from £6.65 million reported a year ago. Mission Marketing group, a marketing communications and advertising company specializing in providing national and international clients with marketing, advertising and business communications will release interim results. It is expected to report a full year profit of £3.20 per share, against £6.54 reported for the same period a year earlier. Analysts expect the company to report a full year revenue of £86 million , up from £85.98 million a year ago.

Bullion rises towards the previous session's record highs as investors remain concerned over the potential impact of further quantitative easing on the currency markets. Gold bid at $1,293.25 an ounce at 1515 GMT against $1,289.60 late in New York on Wednesday.

CORPORATE RESULTS
DATE - 24/September/2010
COMPANY NAME EVENT

Bond International Software Dillistone Pinnacle Staffing Group Tawa Mission Marketing group Aegis Group Catlin Group Globus Maritime Henderson Group

Interim 2010 Interim 2010 Interim 2010 Interim 2010 Interim 2010 Interim Dividend Payment Interim Dividend Payment Interim Dividend Payment Interim Dividend Payment Interim Dividend Payment Interim Dividend Payment Interim Dividend Payment Interim Dividend Payment Interim Dividend Payment Interim Dividend Payment Interim Dividend Payment Interim Dividend Payment Interim Dividend Payment Interim Dividend Payment Interim Dividend Payment Trading Announcement Trading Announcement

MARKET BRIEFING

Henderson Opportunities Trust Kingspan Group

European shares fell on Thursday, though off their lows after U.S. existing home sales data rose from a 13-year trough. A sharper than expected slowdown in euro zone services and manufacturing growth for September was compounded in the afternoon session by a surprise rise in U.S. jobless claims, before the home sales data. FTSE 100 closed at 5547.08. Against the dollar sterling was up slightly at $1.5669. The UK currency's trade-weighted index stood at 80.9, pulling away from a two-month low of 80.4 hit on Wednesday due to the pound's gains versus the euro. At 1230 GMT, the euro was down 0.6 percent at 85.00 pence , although this still left it in sight of a four-month high of 85.77 pence and its 200-day moving average, currently at 85.95 pence. UK gilt futures extended gains by around 15 ticks following a rise in U.S. Treasury prices after higher-thanexpected weekly U.S. jobless claims figures. Before the news, the December gilt future was at 15 ticks up at 124.18, and it rose as high as 124.35 shortly afterwards. Ten-year gilt yields were 2 basis points down on the day at 2.95 percent. U.S. crude oil futures turned positive on Thursday, led by RBOB gasoline futures that were lifted by news that

London Capital Group Paddy Power Patsystems Promethean World Rotork SPARK VCT SPARK VCT 2 Ultra Electronics Holdings Xaar Alpha Tiger Property Trust Euromoney Institutional Invest

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