Cautious advance on big day for macro-data
Market Movers
techMARK 2,122.35 +0.31%
FTSE 100 5,803.85 +0.42%
FTSE 250 11,797.39 +0.37%
Leading
shares are firmer on balance, helped by consumer confidence data that
was not as bad as feared. Consultancy GfK´s consumer confidence gauge
for the month of September rose by 1 point in September, to -28. The
consensus estimate was for a retreat to -30.
The increase in
the index comes after it was unchanged for four consecutive months and
could mark the start of an improvement in consumer confidence after an
extended period of weakness, comment analysts at Barclays Research.
Investors are not rushing to pile into equities, however, what with the
release of the results of the Spanish bank stress tests due out this
afternoon. In addition, ratings agency Moody’s is expected to conclude
its review for a possible further downgrade of Spain.
Investors
are also facing a barrage of 'first-tier' economic data expected out
Stateside. Back in Blighty, the Office for National Statistics will
publish its index of services data at 09:30.
It's all about security ... job security
Nick Buckles, Group Chief Executive Officer (CEO) of security firm G4S, is to keep his job after dodging the blame in the group's internal report into the Olympics staffing fiasco.
David Taylor-Smith, Chief Operating Officer and Regional Chief
Executive Officer of UK and Africa, and Ian Horseman Sewell, Managing
Director, G4S Global Events, have been thrown under the bus, however,
leading to a shake-up in the management structure of G4S.
"Our
review of the company's performance on this contract has been extremely
thorough and, whilst the failures are largely specific to the very
special nature of this contract, we will learn from mistakes made. We
are taking actions in relation to both the management and governance of
G4S to ensure we continue to deliver the highest standards of customer
service and contract delivery across the group," said John Connolly, who
joined G4S as Chairman on June 8th.
Car insurer Admiral
is lower after the Office of Fair Trading referred the private motor
insurance market to the Competition Commission, as it is concerned that
the market is not working well for motorists.
Electronics components distributor Electrocomponents
is under the cosh after it issued a profit warning. First half
performance is now expected to be lower than anticipated, although the
group expect profits in the second half to benefit from a combination of
a return to sales growth and actions to improve operating margins.
Pubs owner Mitchells and Butlers
said like-for-like (LFL) sales increased 3% in the nine weeks to
September 15th as the Olympic and Paralympic Games had little impact on
overall sales. Total LFL sales for the 51 weeks to September rose 2.1%
with food sales up 2.9% and drink sales up 1.4%.
Multi-national design and engineering consultancy Hyder
said it now expects first half pre-tax profit to be well ahead of
previous forecasts, buoyed by the timing of performance bonuses earned
in Australia.
Intermediate Capital Group, the
specialist investment firm and asset manager, saw assets under
management rise to €12bn as at September 27th from €11.8bn as at July
9th. The group added that its investment company portfolio was
"resilient with low level of realisations".
Vodafone has seen its price target slashed at Goldman Sachs, to 227p from 233p. Analysts at HSBC have upgraded their view on shares of Tesco to overweight.
Other markets
As might be deduced from the buoyancy of mining stocks this morning, metals prices are heading higher on the futures markets.
Gold for
December delivery is up $1.70 to $1,782.20 an ounce while copper for
December delivery is currently priced at $376.60 a pound, up $2.20 on
the day.
Brent crude is also heading north, with the
November contract 65 cents dearer at $112.66. The yield on the
benchmark 10-year gilt down to 1.71% from 1.73% overnight, as gilt
prices edge up.
| AIM/Small Cap Report |
FTSE 100 - Risers
Evraz (EVR) 252.00p +3.07%
Vedanta Resources (VED) 1,046.00p +2.65%
Fresnillo (FRES) 1,825.00p +2.64%
Wolseley (WOS) 2,704.00p +2.62%
Eurasian Natural Resources Corp. (ENRC) 318.90p +2.15%
Antofagasta (ANTO) 1,272.00p +2.09%
Kazakhmys (KAZ) 711.50p +2.01%
Barclays (BARC) 221.55pLeading sha +1.98%
Polymetal International (POLY) 1,079.00p +1.79%
Weir Group (WEIR) 1,809.00p +1.74%
FTSE 100 - Fallers
Admiral Group (ADM) 1,064.00p -1.94%
Compass Group (CPG) 698.00p -0.92%
Melrose (MRO) 243.70p -0.81%
Kingfisher (KGF) 265.60p -0.71%
RSA Insurance Group (RSA) 111.40p -0.54%
National Grid (NG.) 690.50p -0.36%
Pearson (PSON) 1,214.00p -0.25%
Tesco (TSCO) 334.75p -0.24%
British Sky Broadcasting Group (BSY) 749.50p -0.20%
Marks & Spencer Group (MKS) 359.90p -0.17%
FTSE 250 - Risers
Bumi (BUMI) 153.00p +4.01%
Savills (SVS) 408.70p +3.18%
Jardine Lloyd Thompson Group (JLT) 781.50p +2.83%
Afren (AFR) 139.50p +2.35%
Ferrexpo (FXPO) 202.60p +2.32%
Homeserve (HSV) 222.90p +2.29%
Centamin (DI) (CEY) 91.50p +2.06%
Dixons Retail (DXNS) 19.79p +2.01%
Ashmore Group (ASHM) 345.70p +1.98%
Ophir Energy (OPHR) 602.00p +1.95%
FTSE 250 - Fallers
Electrocomponents (ECM) 202.10p -8.01%
London Stock Exchange Group (LSE) 949.00p -7.41%
Cranswick (CWK) 778.00p -2.08%
Premier Farnell (PFL) 172.10p -1.99%
St James's Place (STJ) 362.50p -1.73%
New World Resources A Shares (NWR) 268.80p -1.39%
Daejan Holdings (DJAN) 2,876.68p -1.15%
Kenmare Resources (KMR) 39.85p -1.12%
Diploma (DPLM) 472.00p -1.03%
Hansteen Holdings (HSTN) 77.05p -0.96%
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| UK Event Calendar |
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| FTSE 100 | Euronext | Dax perf | CAC 40 |
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INTERIMS
Goals Soccer Centres, Harvey Nash Group
INTERIM DIVIDEND PAYMENT DATE
Acencia Debt Strategies Ltd., Belvoir Lettings, Clarkson, Concurrent
Technologies, Downing Income VCT 3 E Shs, InterContinental Hotels Group,
Jupiter European Opportunities Trust, London Capital Group Holdings,
Maven Income & Growth 4 VCT, Maven Income & Growth 4 VCT 'S'
Shares, North Midland Construction, Paddy Power, Rotork, Tamar European
Industrial Fund Ltd., Temple Bar Inv Trust, Wood Group (John)
QUARTERLY PAYMENT DATE
Duet Real Estate Finance Ltd, MedicX Fund Ltd., Premier Energy & Water Trust
INTERNATIONAL ECONOMIC ANNOUNCEMENTS
Balance of Payments (GER) (07:00)
Chicago PMI (US) (13:45)
GFK Consumer Confidence (GER) (07:00)
International Reserves (EU) (11:00)
Personal Consumption Expenditures (US) (13:30)
Personal Income (US) (13:30)
Personal Spending (US) (13:30)
U. of Michigan Confidence (Final) (US) (15:00)
ANNUAL REPORT
African Consolidated Resources
SPECIAL DIVIDEND PAYMENT DATE
Dunedin Enterprise Investment Trust, Hargreaves Lansdown
AGMS
600 Group, African Consolidated Resources, Blavod Wines & Spirits,
Catalyst Media Group, Downing Income VCT 3 D Shs, Eros International,
Eurasia Drilling Co Ltd GDR (Reg S), Himachal GDR (144a), HML Holdings,
Impact Holdings, Infrastructure India, IPSA Group, MediaZest, Minera IRL
Ltd., Sky High
TRADING ANNOUNCEMENTS
Hyder Consulting
UK ECONOMIC ANNOUNCEMENTS
Consumer Confidence (09:30)
FINAL DIVIDEND PAYMENT DATE
Avarae Global Coins, BHP Billiton, Cash Converters International Ltd,
Downing Absolute Income VCT 2, Downing Distribution VCT 1, Downing
Income VCT 3, Downing Structured Opportunities VCT 1, Downing Structured
Opportunities VCT 1 'B' Shares, Downing Structured Opportunities VCT 1
'D' Shares, Hargreaves Lansdown, Immunodiagnostic Systems Holdings, NCC
Group
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| US Market Report |
Stocks Move Back To The Upside Following Recent Weakness
After
moving mostly lower over the past few sessions, stocks moved notably
higher over the course of the trading day on Thursday. The markets
benefited from a positive reaction to the latest developments overseas
as well as some upbeat U.S. jobs data.
The major averages gave back some ground in the final hour of trading but remained firmly positive. The Dow rose 72.46 points or 0.5 percent to 13,485.97, the Nasdaq jumped 42.90 points or 1.4 percent at 3,136.60 and the S&P 500 climbed 13.83 points or 1 percent to 1,447.15.
The
strength on Wall Street was partly due to optimism about the
possibility of further stimulus from China, with reports suggesting that
the China Securities Regulatory Commission will take steps to prop up
the domestic equity market.
The rumors out of China contributed to a late-day rally by the Shanghai Composite Index, which surged up by 2.6 percent on the day.
Further
buying interest was generated by the unveiling of Spain's budget for
2013, which seeks to balance the country's deficit by focusing on
spending cuts rather than tax increases.
The controversial budget
sparked massive protests earlier in the week but is designed to
pre-empt tougher conditions as part of a potential international
bailout.
On the U.S. economic front, the Labor Department released a report showing a much bigger than expected drop in weekly jobless claims.
The report showed that jobless claims
fell to 359,000 in the week ended September 22nd from the previous
week's revised figure of 385,000. Economists had expected jobless claims
to drop to 376,000 from the 382,000 originally reported for the
previous week.
With the bigger than expected drop, jobless claims
fell to their lowest level since coming in at 357,000 in the week ended
July 21st.
Meanwhile, the Commerce Department released a pair of disappointing reports on durable goods orders and second quarter GDP.
While
one report showed that durable goods orders plummeted by 13.2 percent
in August amid a sharp drop in orders for transportation equipment, a
separate report showed that GDP grew by less than previously estimated
in the second quarter.
Traders mostly focused on the
upbeat jobs data, however, as the reports from the Commerce Department
were seen as largely backward-looking in light of the Federal Reserve's
recent decision to enact a third round of quantitative easing.
Sector News
Gold stocks
turned in some of the market's best performances on the day, driving
the NYSE Arca Gold Bugs Index up by 2.7 percent. The strength in the
gold sector came amid a notable increase by the price of the precious
metal, with gold for December jumping $26.90 to $1,780.50 an ounce.
Significant
strength also emerged among semiconductor stocks, as reflected by the
2.3 percent gain posted by the Philadelphia Semiconductor Index. The
gain by the index came after it ended the previous session at a
two-month closing low.
Computer hardware stocks also regained some ground following recent weakness, with the NYSE Arca Computer Hardware Index advancing by 2.2 percent after hitting its worst closing level in over a month on Wednesday.
Natural gas, housing, and networking stocks also posted notable gains on the day, moving higher along with most of the major sectors.
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| Friday newspaper round-up |
Spain, US drought, Iberdrola
Spain
has pushed through 40bn euros of fresh austerity measures in the teeth
of recession, despite violent protests across the country and separatist
crises in Catalonia and the Basque region that threaten to break the
country apart. Premier Mariano Rajoy has frozen public pay in 2013 for
the third year in a row. The agriculture ministry and culture expenses
will be cut by 30 per cent and the defence bureacracy by 15 per cent. It
comes on top of a 62bn euros squeeze already in the pipeline. He
brushed aside warnings that fiscal overkill – at a time when
unemployment is already 25 per cent – could push the country into
turmoil, saying he would listen only to the “silent majority” of
responsible citizens. Bowing to pressure from Brussels, the government
has agreed to an independent budget office and a clampdown on early
retirement. Pensions will rise by 1 per cent, paid for by raiding the
social security reserve fund. The closed professional guilds and old-boy
networks dating back to the Franco era will, in theory, be shaken up.
The plan was carefully crafted with the European Commission, which
praised the measures as “concrete, ambitious and well-focused,” The
Telegraph reports.
The devastating effects of drought
across the US farm belt were on display as estimates of annualised
economic growth for the second quarter were revised down from 1.7% to
1.3%. A decline in farm inventories contributed 0.2 percentage points of
the cut to growth reflecting the damage to crops in states such as
Kansas and Missouri. The lower estimate confirms the weakness of the
economy earlier in the year but does not suggest a broader loss of
momentum, because the damage from the drought will not continue in
future quarters.With the presidential campaign in full swing even a
revision was enough to draw political attention. Mitt Romney compared US
growth with that of large developing countries. He said Russia was
expanding at 4% and China at 7-8%. “This is unacceptable,” he said, The
Financial Times reports.
Spanish energy giant Iberdrola
is mulling the sale of a stake in its UK power grid, in the latest sign
that new investors will be needed to fund the planned £200bn overhaul
of the energy sector. ScottishPower Energy Networks, which analysts
value at up to £5bn, owns electricity transmission pylons and cables in
southern Scotland and distribution networks in southern Scotland,
northern England and Wales, serving about 3.5m homes. It requires an
estimated £8bn investment this decade to replace ageing cables and
substations and to connect up and transport power from 11GW of new wind
farms that are due to be built in Scotland. Sources with knowledge of
the situation said Iberdrola - which is also planning £4bn investment in
its ScottishPower generation business - was looking at selling a
minority stake in the grid business as a means of funding the upgrade
without increasing its debt, The Telegraph says.
Transocean,
the world’s largest offshore oil driller, has been served with a
preliminary injunction in Brazil, forcing the company to stop operations
in the country within 30 days over an oil spill last year. A federal
court in Rio de Janeiro served the company with the ban on Thursday,
which Transocean said it is “vigorously” trying to overturn. Last
November, about 3,700 barrels of oil flooded into the Atlantic Ocean off
Rio de Janeiro from an offshore oilfield operated by US oil firm
Chevron and which Transocean had been contracted to drill. The spill,
which occurred when workers encountered unexpected pressure when digging
a well, was followed by another small leak in March that is still being
investigated, The Financial Times writes.
Steve Morgan, the chairman of Redrow,
is on Friday expected to table a takeover bid for the house-builder he
founded valuing the company at up to £629m. The offer, set to be pitched
at 165p to 170p a share, is expected to be made to the board ahead of
today’s Takeover Panel deadline. The bid would represent an increase of
between 9% and 12% to the 152p indicative offer Mr Morgan made for the
company last month. It would also come at a 35% premium to the
undisturbed closing price for the house-builder and is a considerable
increase on the balance sheet value of the company, were it to be marked
to market. Mr Morgan, who already holds more than 40% of Redrow, made
the consortium approach via Bridgemere Securities, together with 14%
shareholder Tosca Fund and Penta Capital, according to The Telegraph.
Marks & Spencer
is to create 1,000 jobs over the next year under plans to boost its
online operations, the retailer announced today. The new roles will be
at a 900,000 sq ft distribution centre in Castle Donington,
Leicestershire, from where M&S expects to distribute two million
clothing and home products a week. Around 100 people are already working
at the site ahead of the centre's opening early next year, with the
jobs figure set to rise over the course of the year. IT and logistics
director Darrell Stein said: "Castle Donington is a key part of
M&S's strategy for the future. This new distribution centre will
help us deliver our goal of being a leading multi-channel retailer by
2015," The Independent reports.
Tesco is poised to
announce its first profit fall in almost 20 years, as the problems
highlighted by its January profit warning are laid bare. Clive Black,
analyst at Shore Capital, forecasts a 12% decline in Tesco’s pre-tax
profit, excluding property profits, to £1.52bn in the six months to
August 25. He described the profit decline expected to be announced on
Wednesday as “generational”. Philip Dorgan, analyst at Panmure Gordon,
and another long-term follower of Tesco, said it was the company’s first
profit decline since 1994, when earnings were hurt by Tesco changing
its depreciation policy, The Financial Times explains.
Shares in technology group IndigoVision,
which was at the centre of a bitter boardroom battle less than a year
ago when its founder was ousted, soared to their highest level in almost
18 months yesterday after posting bumper profits. Chairman Hamish
Grossart, who replaced former chief executive Oliver Vellacott with
finance director Marcus Kneen in December, said that the progress made
since had highlighted there had been “much that needed adjusting” at the
Edinburgh-based firm. Grossart said a “tremendous amount” had already
been achieved under Kneen’s “energetic and effective leadership”. He
added: “These are excellent results from a business with the potential
to be much larger. “Although change is not always easy, there is now a
visible spring in the step of management worldwide as they see
improvements being made that should unlock IndigoVision’s potential.”
The group – which makes CCTV systems for airports, casinos, ports and
other sites – posted an operating profit of £2.7m for the year to 31
July, an increase of 123% compared with the previous year as revenues
grew, The Scotsman reports.
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