Friday 27 July 2012
QUOTE OF THE DAY
When a fellow says it ain't the money but the principle of the thing, it's the money
- Frank Hubbard
THIS MORNING IN LONDON
FTSE 100
5,573.92
0.76 0.01%
FTSE 250
11,090.89
51.37 0.47%
FTSE 350
2,962.52
2.15 0.07%
FTSE All Share
2,898.04
1.90 0.07%
AIM 100
3,004.30
3.22 0.11%
AIM All Share
667.18
0.64 0.10%
11:50 am
Stocks flat in Draghi aftermath
- Markets still digesting Draghi's comments
- Barclays leads the risers on the Footise after first-half beat
- 'Fiscal-cliff' worries weigh on sentiment
London's stocks swung between gains and losses on Friday morning and were trading broadly flat by lunchtime, as investors continue to ponder over comments made yesterday by the head of the European Central Bank (ECB).
Equity markets rallied sharply yesterday after ECB President Mario Draghi said that the ECB would do "whatever it takes to preserve the euro...and believe me, it will be big enough".
Gerhard Schwarz, the head of Equity Strategy at Baader Bank, said in an e-mailed note to clients this morning: "This raises the expectations for further steps from the ECB to lower the sovereign bond yields for Italy and Spain, with expectations now building sky-high for the next ECB meeting on 2 August. Markets are likely to be supported initially, but it is questionable if the ECB is really willing to make a complete U-turn on its own."
Today, the 10-year yield on a Spanish bond was down 9.3 basis points (bp) at 6.835%, while Italian equivalent fell 6.8bp to 5.988%. Nevertheless, data out this morning showed that Spanish unemployment continues to rise, with the jobless rate in the second quarter coming in at a whopping 24.63%, up from 24.4% previously and broadly in line with forecasts.
In other news, despite yesterday's reports that Greece had identified EURO11.7bn in additional cuts for 2013 and 2014, Parliament has only approved EURO10bn out of the EURO11.5bn required according to the terms of its bailout. Leaders will meet again on Monday to try to hammer out more details, but the Greek newspaper Kathimerini reported that leaders "have reservations about where the EURO1.5bn of additional savings will come from".
Meanwhile, Christine Lagarde, the Managing Director of the International Monetary Fund, has warned that the major risk to the global economy is now the fast-approaching US 'fiscal cliff', not the Eurozone debt crisis. "Risk number one...is clearly the fiscal cliff in the United States of America, where the deficit and debt to GDP ratios are actually worse than in the Eurozone," she said.
FTSE 100: Repentent Barclays beats expectations
A contrite Marcus Agius, Chairman of under-fire bank Barclays, apologised for the company's involvement in the LIBOR fixing scandal as he unveiled half-year profits ahead of market expectations, causing shares to jump high early on. Adjusted profit before tax in the first half of 2012 rose 13% to GBP4,227m from GBP3,725m in the first half of 2011, versus market expectations of GBP3,958m.
Banking peer HSBC fell after saying that it will offload its 44% stake in card-processing joint venture Global Payments Asia-Pacific for $242m in cash.
Commodities giant Glencore rose as it came closer to completing the GBP3.9bn takeover of Canadian agricultural grain handler Viterra after being given the all-clear by Australian authorities.
Heading the other way was mining colossus Anglo American after first-half profits plunged from $6,571m to just $2,942m on the back of weaker commodity prices and input cost pressures.
Publishing group Pearson also fell after operating profits came in a little sky of expectations as it admitted that the first half has been a little tougher than expected for some parts of the business.
Goldman Sachs has today cut its price targets on Tullow Oil (to 1776p from 2020p) and Royal Dutch Shell (to 2840p from 2980p). Coincidentally, the Financial Times' Lex column the recent volatility in oil quotes and the challenge which that poses for the sector.
FTSE 250: Strong top-line growth at UBM
Exhitbitions group and business publisher UBM was a high riser after reporting strong underlying revenue growth in the first half and revealing that it is "exploring strategic options" for its Data Services division.
AG Barr, the soft drinks group, was losing its fizz as margins came under pressure, with the recent heavy rainfall in the UK only adding to the gloom.
High Street bookie William Hill surged after improving profits by 13% in the first half, with online and mobile businesses driving growth.
Coal and coke group New World Resources dropped despite maintaining its full-year production and sales targets. The first revealed that while production was up in the second quarter (from the first), realised prices slipped.
FTSE 100 - Risers
Barclays (BARC) 162.45p +5.76%
ITV (ITV) 78.40p +3.36%
Weir Group (WEIR) 1,641.00p +2.56%
British Sky Broadcasting Group (BSY) 719.50p +1.84%
Carnival (CCL) 2,118.00p +1.68%
Marks & Spencer Group (MKS) 328.50p +1.55%
Petrofac Ltd. (PFC) 1,448.00p +1.54%
Royal Bank of Scotland Group (RBS) 211.00p +1.49%
Kingfisher (KGF) 265.30p +1.41%
Sage Group (SGE) 291.90p +1.32%
FTSE 100 - Fallers
Anglo American (AAL) 1,884.50p -4.05%
Pearson (PSON) 1,246.00p -3.71%
Polymetal International (POLY) 860.50p -1.49%
Schroders (SDR) 1,269.00p -1.48%
Hargreaves Lansdown (HL.) 563.50p -1.40%
Unilever (ULVR) 2,225.00p -1.37%
Ashmore Group (ASHM) 319.90p -1.17%
Capital Shopping Centres Group (CSCG) 322.10p -1.17%
Intertek Group (ITRK) 2,799.00p -1.13%
United Utilities Group (UU.) 694.50p -1.00%
FTSE 250 - Risers
UBM (UBM) 640.50p +5.52%
William Hill (WMH) 304.90p +4.99%
Cookson Group (CKSN) 549.50p +3.10%
Talvivaara Mining Company (TALV) 135.90p +2.95%
Daejan Holdings (DJAN) 2,917.00p +2.93%
Rank Group (RNK) 120.30p +2.91%
Homeserve (HSV) 200.10p +2.72%
Ruspetro (RPO) 141.00p +2.62%
Ashtead Group (AHT) 254.70p +2.54%
Halfords Group (HFD) 200.20p +2.35%
FTSE 250 - Fallers
New World Resources A Shares (NWR) 300.30p -3.66%
Invensys (ISYS) 240.10p -2.40%
JD Sports Fashion (JD.) 660.00p -1.79%
Hochschild Mining (HOC) 411.50p -1.70%
Ophir Energy (OPHR) 610.50p -1.69%
Barr (A.G.) (BAG) 423.90p -1.58%
NMC Health (NMC) 193.00p -1.53%
Devro (DVO) 302.50p -1.47%
RPS Group (RPS) 240.40p -1.44%
Cairn Energy (CNE) 270.70p -1.42%
ON THE SHARECRAZY BLOG
The brief market history of Noventa is truly horrendous and serves as a reminder of the dangers of gung ho mining projects in far off places.
Noventa was bought to AIM in the heady days of March 2007 by Investec at a price (in today's money) of GBP35 per share valuing the business at around GBP60 million. It raised GBP15 million and the idea was to develop the Marropino mine in Mozambique into one of the world's largest producers of Tantalum concentrate, Tantalum being a rare metal used primarily in consumer electronic products. The Fleming family and connected parties retained control.
Things went wrong almost immediately when the company announced a couple of months after flotation that problems had been encountered at the mine and that the business plan set out in the Admission document could effectively be torn up.
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WHAT THE BROKERS SAY
THE LATEST ON THE CRAZY BOARD
The top 5 hot company threads on the Bulletin Board:
Providence Resources
Falkland Oil & Gas
3 Legs Resources
Falkland Oil & Gas
Running trading thread
Click here to discuss shares with other ShareCrazy members
BOOK OF THE WEEK
By Jack D. Schwager
A book review by James Faulkner of WatsHot.com
As of April 2012 the hedge fund industry reached a record high of $2.13 trillion total assets under management, having surpassed the previous high of $1.93 trillion in 2008 before the onset of the financial crisis. While the industry remains a relatively small component of the financial sector at large (it accounted for just 1.1% of the total funds and assets held by financial institutions as of 2009), it is often said to attract the creme de la creme of industry talent, and is home to the money of the some of the richest people on the planet.
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