Tuesday 26 June 2012
QUOTE OF THE DAY
When you've got them by their wallets, their hearts and minds will follow
- Fern Naito
THIS MORNING IN LONDON
FTSE 100
5,453.18
2.53 0.05%
FTSE 250
10,686.34
14.92 0.14%
FTSE 350
2,892.59
1.69 0.06%
FTSE All Share
2,829.92
1.87 0.07%
AIM 100
2,948.22
-0.01 0.00%
AIM All Share
662.62
-1.00 -0.15%
11:46 am
Stocks flat on mixed Eurozone news
- German consumer sentiment improves
- Cyprus asks for a bailout
- Perhipery bond auctions see yields rise
London's Footsie swung between gains and losses on Tuesday morning on the back of mixed news from the Eurozone. Investors are likely to remain cautious ahead of the crucial EU summit on June 28-29th.
The GfK forward-looking German consumer climate indicator improved from 5.7 in June to 5.8 in July; analysts were expecting a slight fall to 5.6. While economic expectations plummeted, there was a rise in both income expectations and willingness to buy.
There were reports that the European Commission could be able to rewrite national budgets of countries that do not pass EU deficit rules. The idea is expected to be discussed at this week's summit.
Cyprus officially became the fifth Eurozone country to request a bailout yesterday, announcing last night that it would be applying for EU rescue funds for its banking sector and blaming the move on their exposure to Greece. According to a European official cited by Reuters, Cyprus could need up to EURO10bn, more than half the size of its economy.
In other news, Moody's has downgraded no less than 28 Spanish banks by one to four notches due to the weakening of the Spanish government's creditworthiness. Spain tapped the sovereign debt market this morning for a total of EURO3.077bn in three- and six-month bills; however, yields advanced while demand for debt was weak compared with the previous auction. Italy also sold EURO3.9bn in two-year bonds today and saw yields hit a new high since December.
In domestic news, UK government finances took a hit in May as a drop in income tax receipts and a rise in spending pushed public borrowing higher. Net borrowing, excluding the temporary effects of financial interventions, hit GBP17.9bn, up from GBP15.2bn last May, according to the Office for National Statistics. The figure was higher than many analysts' expectations of around GBP14.8bn.
FTSE 100: Croda and Shire on the up
Speciality chemicals group Croda International was a high riser after JP Morgan Cazenove upgraded the stock to 'overweight', lifting its target price from 2,220p to 2,600p.
Shire was making gains, rebounding after a heavy sell-off the day before on the back of generic competition issues surrounding its ADHD drug, Adderall XR. Shire was given a lift this morning by Panmure Gordon, Berenberg and Societe Generale who all upgraded their ratings on the stock.
International outsourcing firm Serco fell after saying it expects revenues in the first half to take a hit from tough conditions in America.
Oil and gas services provider Petrofac underwhelmed after reiterating its full-year net profit growth guidance of 15%. After an initial rise, gains were erased after Investec downgraded its rating on the stock from 'buy' to 'hold', highlighting the decline in the group's backlog.
Insurance group Resolution was also lower after Investec downgraded the stock by two notches from 'buy' to 'sell' and more than halved its target price. "We have significantly reduced our embedded value estimates and this highlights that there is likely to be less cash generation in the future," the broker said.
Banks were heavily out of favour this morning. RBS fell on the back of technical issues at Natwest over the last few days. Meanwhile, lenders Barclays and Lloyds were also down, tracking their European counterparts lower.
FTSE 250: Ocado drops 18% on third-quarter uncertainty
Online grocer Ocado plummeted despite some seemingly 'in-line' first-half results. However the group said that third-quarter trading was hard to forecast; it has already seen some disruption from the Jubilee events and there is "uncertainty as to the effect of the forthcoming Olympic Games".
Transport group Stagecoach jumped after revenues rose 8.4% in the year to the end of April and the total dividend was raised by 10%. Pre-tax profit however dipped slightly.
FTSE 100 - Risers
Croda International (CRDA) 2,188.00p +2.96%
Kazakhmys (KAZ) 690.50p +2.45%
Shire Plc (SHP) 1,780.00p +2.12%
Vedanta Resources (VED) 895.00p +2.05%
Tate & Lyle (TATE) 647.00p +1.89%
Polymetal International (POLY) 939.50p +1.57%
Randgold Resources Ltd. (RRS) 5,765.00p +1.50%
Evraz (EVR) 258.40p +1.45%
BP (BP.) 407.50p +1.36%
Rio Tinto (RIO) 2,909.50p +1.29%
FTSE 100 - Fallers
Serco Group (SRP) 522.00p -3.33%
Royal Bank of Scotland Group (RBS) 229.00p -3.29%
Old Mutual (OML) 150.80p -1.89%
Capita (CPI) 637.50p -1.47%
Glencore International (GLEN) 304.00p -1.35%
Smiths Group (SMIN) 990.00p -1.20%
Resolution Ltd. (RSL) 194.30p -1.02%
Burberry Group (BRBY) 1,318.00p -0.90%
ARM Holdings (ARM) 495.30p -0.88%
Xstrata (XTA) 787.30p -0.87%
FTSE 250 - Risers
Petra Diamonds Ltd.(DI) (PDL) 125.00p +5.49%
Stagecoach Group (SGC) 263.40p +5.44%
Carpetright (CPR) 686.00p +4.97%
Smith (DS) (SMDS) 138.80p +4.20%
Menzies(John) (MNZS) 595.50p +3.57%
Kentz Corporation Ltd. (KENZ) 367.30p +3.46%
Rank Group (RNK) 121.00p +3.42%
JD Sports Fashion (JD.) 651.00p +3.33%
Daejan Holdings (DJAN) 2,583.00p +3.32%
Spirit Pub Company (SPRT) 50.00p +3.09%
FTSE 250 - Fallers
Ocado Group (OCDO) 86.75p -19.75%
Halfords Group (HFD) 227.80p -2.77%
Man Group (EMG) 73.40p -1.94%
Michael Page International (MPI) 344.10p -1.80%
Atkins (WS) (ATK) 675.00p -1.75%
Chemring Group (CHG) 288.90p -1.50%
Ultra Electronics Holdings (ULE) 1,558.00p -1.45%
Tullett Prebon (TLPR) 288.10p -1.40%
IG Group Holdings (IGG) 470.80p -1.36%
Dixons Retail (DXNS) 17.25p -1.32%
TIP OF THE DAY
An extract from the diaries of infamous bear raider Evil Knievil
June 20th 2012 Yesterday's Times ran a lead story on taxation avoidance. I reckon that the scheme insofar as it was described accurately seems to me to be defective in that it is clearly artificial. I imagine that some bright spark at HMRC has noted this long ago. So I suspect that quite a lot of taxpayers are going to have their files reopened. For those on the paying out side, this will not be fun.
Click here to read the read of the article
WHAT THE BROKERS SAY
THE LATEST ON THE CRAZY BOARD
The top 5 hot company threads on the Bulletin Board:
Harvest Natural Resources
Maxima Holdings
Great Eastern Energy
Mediawatch
Running trading thread
Click here to discuss shares with other ShareCrazy members
BOOK OF THE WEEK
By Simon Lack
A book review by Luka Lukic of t1ps.com
Hedge funds have always been the talk of the town. Every year we read about the billions paid to top 10 hedge fund managers and investors rush to give their money to them in the hopes of exceptional return. However, in this brutally honest book, industry insider Simon Lack looks to strip away the facade and reveal the cold truth about the profits hedge funds actually make. In the first sentence of the book he writes: "If all the money that's ever been invested in hedge funds had been put in treasury bills instead, the results would have been twice as good." A staggering statement which leads us to question why they have been placed on a pedestal.
Click here to view the rest of the article
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