Thursday 21 June 2012
QUOTE OF THE DAY
Give a man a fish and he eats for a day. Teach him how to fish and you get rid of him all weekend
- Zenna Schaffer
THIS MORNING IN LONDON
FTSE 100
5,584.60
-37.69 -0.67%
FTSE 250
10,973.28
-49.53 -0.45%
FTSE 350
2,963.34
-19.13 -0.64%
FTSE All Share
2,898.26
-18.46 -0.63%
AIM 100
3,068.03
-7.21 -0.23%
AIM All Share
682.46
-0.35 -0.05%
11:37 am
Economic data drives stocks lower
- Chinese, Eurozone PMIs paint gloomy picture
- Spanish banking-sector audits due today
- Miners, oil stocks fall
Disappointing economic data, a negative revision to US growth and rising bond yields in Spain combined to put downward pressure on UK stocks on Thursday, with the Footsie trading firmly in the red by lunchtime.
The Chinese manufacturing sector purchasing managers' index (PMI) for the month of June compiled by Markit fell from 48.4 to 48.1 in June, a seven-month low. Many observers believe that the Asian powerhouse will bottom-out in the current quarter.
Furthermore, Markit's composite PMI for the Eurozone was 46.0 in June, unchanged from May's 35-month low. "With the exception of a marginal increase in January, the survey has recorded continual contraction since last September, with the rate of decline having gathered significant momentum in the second quarter," Markit said.
The keenly-awaited policy decision in the US last night failed to boost markets as was hoped, after the Federal Reserve also downgraded its growth expectations for the world's largest economy. While the Federal Open Market Committee decided to extend its 'Operation Twist' programme, which involving the sale of short-term debt in exchange for long-term securities with the intention of flattening the interest rate curve, the central bank said it expects US GDP to grow by 1.9-2.4% in 2012, down from earlier predictions of a 2.4-2.9% expansion.
Meanwhile, Spain managed to sell EURO2.22bn in debt, topping its EURO2bn top-end target. However, borrowing costs surged again compared with the previous auction. Consultancy groups Oliver Wyman and Roland Berger are expected to present their evaluations of the Spanish banking sector at some point today. Fitch calculates a potential capital shortfall of EURO90-100bn under a "Irish stress scenario".
FTSE 100: Resources stocks suffer from risk-off trade
Concerns over the Chinese economy pressured sharp falls in the mining sector this morning as investors expressed worries about slowing demand. Anglo American, Kazakhmys, Vedanta and Xstrata were among the worst performers.
Meanwhile, surging oil inventories in the US and concerns over the Eurozone sent oil futures tumbling, meaning that both BP and BG Group were registering losses.
Unilever was making gains after Investec warned investors not to look too much into the profit warnings across the sector, reassuring that the UK-listed company is not like peers P&G and Danone. "For us, ULVR is a company that is gaining momentum rather than losing it, whose input pressures are getting better rather than worse, who is relatively less exposed to slowing geographies and who is less of a hostage to guidance fortune."
Water company Severn Trent fell after announcing the launch of a 10-year sterling bond with a coupon linked to the retail prices index. The bonds will pay interest semi-annually at a real rate of interest of 1.3% per annum adjusted to take account of changes in the level of the UK Retail Prices Index (RPI). The bonds, to be issued at GBP100 a throw, could, however, end up paying less than 1.3% per year if the UK experiences deflation.
FTSE 250: Invensys trims prior day's gains
Bid talks which got the market excited on Wednesday about Invensys, the maker of rail signalling and industrial automation systems, have hit the buffers already causing shares to pull back. In response to press speculation about an approach from Emerson Electric for some of the company'sassets, news of which leaked out on Wednesday, Invensys said talks with Emerson are no longer taking place.
Legacy software specialist Micro Focus delivered full-year results in line with guidance, with licence fee growth offsetting a foreseen decline in maintenance revenues. Merchant Securities initiated coverage on the stock with a 'buy' rating this morning, saying that it was impressed with its "excellent" cash generation.
Construction equipment leasing firm Ashtead Group jumped after reporting record profits as tight cost control and strong demand in the US helped the firm beat analyst expectations.
FTSE 100 - Risers
Lloyds Banking Group (LLOY) 31.55p +1.11%
International Consolidated Airlines Group SA (CDI) (IAG) 160.00p +1.07%
Reckitt Benckiser Group (RB.) 3,400.00p +0.98%
Standard Life (SL.) 230.40p +0.66%
Carnival (CCL) 2,293.00p +0.66%
ITV (ITV) 77.00p +0.65%
Sage Group (SGE) 269.20p +0.64%
Old Mutual (OML) 159.60p +0.63%
Admiral Group (ADM) 1,186.00p +0.59%
RSA Insurance Group (RSA) 107.10p +0.56%
FTSE 100 - Fallers
Vedanta Resources (VED) 953.00p -2.56%
Anglo American (AAL) 2,159.50p -2.51%
Kazakhmys (KAZ) 737.00p -2.45%
BP (BP.) 415.50p -2.38%
Xstrata (XTA) 850.10p -2.30%
Glencore International (GLEN) 325.60p -2.30%
Morrison (Wm) Supermarkets (MRW) 266.90p -2.20%
Weir Group (WEIR) 1,528.00p -1.93%
Evraz (EVR) 276.10p -1.92%
BG Group (BG.) 1,262.50p -1.83%
FTSE 250 - Risers
Ruspetro (RPO) 140.70p +5.79%
Micro Focus International (MCRO) 472.30p +4.49%
Ashtead Group (AHT) 259.30p +3.55%
JD Sports Fashion (JD.) 645.00p +3.12%
Stobart Group Ltd. (STOB) 121.60p +2.79%
Daejan Holdings (DJAN) 2,640.00p +2.33%
Regus (RGU) 91.55p +2.23%
Spectris (SXS) 1,590.00p +2.19%
Redrow (RDW) 119.00p +2.15%
ITE Group (ITE) 195.60p +2.03%
FTSE 250 - Fallers
Invensys (ISYS) 214.90p -16.38%
Aquarius Platinum Ltd. (AQP) 53.30p -10.72%
New World Resources A Shares (NWR) 314.60p -4.41%
Afren (AFR) 105.00p -4.20%
Betfair Group (BET) 763.50p -3.84%
EnQuest (ENQ) 112.60p -3.01%
Man Group (EMG) 75.55p -2.95%
Centamin (DI) (CEY) 67.25p -2.68%
Talvivaara Mining Company (TALV) 166.20p -2.52%
Computacenter (CCC) 300.80p -2.40%
ON THE SHARECRAZY BLOG
The Euro story reaches new heights of comedy/tragedy (depending on your perspective) each day. No longer on the main stage but playing out as a side drama is Greece. The central players in the “who goes bust next “ production are now Spain and Italy. This is a when not an if.
I am tempted to ignore Greece as a sideshow but for pure comedy value it is worth mentioning. Apparently the putative coalition partners need to spend the next couple of days agreeing on who is to put whose fingers into which till. Okay that is not the official reason. The stated purpose of the talks is “to agree how to renegotiate Greece’s bailout terms with the EU.” Stop laughing. With perhaps the weakest hand in history the fat slobs who run Pasok and New Democracy reckon they can get a better deal. In the same way that, some Greeks, must have thought back in 1940 that by talking nicely to the Panzer Divisions as they raced down the Great North Road they might have persuaded them to call off the invasion and admit they should have turned right at Skopje rather than gone straight ahead. So let us give up on Greece. Everyone else has.
Click here to read the read of the article
TIP OF THE DAY
by James Faulkner of WatsHot.com
The recent bid for Nautical Petroleum (NPE) has left punters speculating as to which north sea oiler will be next on the M&A shopping list. Investors could do worse than dip into Ithaca Energy (IAE), whose steeply rising production profile singles it out as a key target - indeed, it has already been the subject of one approach earlier this year.
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:
Vatukoula Gold
Goldstone Resources
Mobilewave Group
Hornby Group
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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