Friday 31 August 2012
QUOTE OF THE DAY
"If it's your job to eat a frog, it's best to do it first thing in the morning. And If it's your job to eat two frogs, it's best to eat the biggest one first."
- Mark Twain
THIS MORNING IN LONDON
FTSE 100
5,754.39
34.94 0.61%
FTSE 250
11,431.47
105.56 0.93%
FTSE 350
3,057.79
19.83 0.65%
FTSE All Share
2,992.00
18.89 0.64%
AIM 100
3,055.40
42.84 1.42%
AIM All Share
678.78
6.06 0.90%
13:50 pm
THOUGHT FOR THE DAY
By Malcolm Stacey
Hello Crazy Gang,
There are days when the Footsie and falls and we all know why. Some bit of dire news or other has spooked the market. The big dealers start selling shares. If more shares are sold than bought, then usually the Footsie falls. Simple.
But there are times when the Footsie falls and nobody really knows why. There is no bad news to rattle the traders. Well, it falls because when there is no news, people have no inclination to either buy or sell shares.
Click here to view the rest of the article
NEW ON THE BLOG
by Lucian Miers
As China Fraud spotter Citron Research found out to its cost last year with Harbin Electric (HRBN), proving fraud beyond reasonable doubt in a Chinese company is no guarantee that a short position will be profitable. Harbin (clearly hugely fraudulent) was taken private by its management, financed by a bank loan which made no financial sense at all and which was clearly an example of “guanxi” at work, the inscrutable relationship based way that business is conducted in China which often seems to defy logic and reason.
Click here to view the rest of the article
TIP OF THE DAY 
A report by Growth Equities & Company Research
Kibo Mining is a Tanzanian-focused multi-commodity exploration business with a large land holding position and interests projects prospective for coal, gold, nickel and uranium.
The Rukwa Coal Project is a NI 43-101 compliant resource of 109Mt thermal coal resource with prospecting licences and applications cover 1,557 km² which provide the opportunity of expanding the current coal resource by further exploration effort.
Kibo benefits from its long association in Tanzania which has allowed the company to put together a 18,000 km² portfolio of gold and nickel licences which is almost 10 times the current government’s limits.
Our valuation is based on just the coal and gold interests; and gives a target price of 2.9p.
Click to Download Full Report
THIS MORNING IN LONDON
Waiting to see what's up Bernanke's sleeve
- All eyes on Bernanke
- Merkel asks Italy to delay bailout request
- Redrow Chairman makes takeover approach
The Footsie had moved into positive territory by Friday lunchtime following three straight days in the red, though gains were only mild as investors showed caution ahead of a pivotal speech by Federal Reserve Chairman Ben Bernanke later this evening.
The big question on everyone's lips - "will Bernanke hint at another imminent round of quantitative easing (QE3)?" - will be answered tonight as the Fed frontman takes the stage in his keynote speech during the meeting of central bankers at Jackson Hole, Wyoming.
"Two years ago at the same symposium, Bernanke dropped hints of QE2 which the Fed then announced a couple of months later. Given the backing in the previous minutes for further stimulus in the US, any hints Bernanke drops are expected to give an indication of how the Fed will act in September," explains analyst Craig Erlam from Alpari.
"Because of this, every word he speaks will be over analysed repeatedly. The likely effect of this won't be that we'll be any better informed on how the Fed will act. Instead, it's more likely to simply fill the headlines over the next couple of weeks," he said.
In other news, following the meeting between German Chancellor Angela Merkel and Italian Prime Minister Mario Monti in Berlin yesterday, Merkel has requested that Italy delays its request for aid, according to Spanish newspaper El Mundo. The reason being due to heightened tensions with the Bundesbank who is opposed to the European Central Bank's proposal of buying sovereign debt to bring down bond yields.
FTSE 100: Miners on the up after recent sell-off
Mining stocks were making gains this morning, rebounding after bearing the brunt of 'risk-off' trade over the past few days. Even including today's rally, average share prices in the mining sector are down 3.4% over the week.
Potential merger partners Glencore and Xstrata were performing well in spite of Qatar Holdings' announcement yesterday that it would vote against the proposed tie-up at the shareholder meeting on September 7th. The Xstrata shareholder supports the tie-up but said that "it will not support the proposed merger terms of 2.8 new Glencore shares for every one existing Xstrata share." The Qataris are wanting Glencore to raise the exchange ratio to 3.2.
Sector peers Fresnillo, Randgold and Antofagasta were also on the up by midday.
Heading the other way was media giant WPP which was extending its losses after having to scale back its full-year like-for-like revenue target yesterday. Societe Generale and Berenberg both reduced their target prices for the stock this morning.
Utilities group SSE was making gains after UBS upgraded its rating for the stock from 'neutral' to 'buy' and hiked its target price by 13% to 1,515p.
FTSE 250: Redrow rises, albeit mildly, on potential takeover
House-builder Redrow was in demand after saying that three investment firms are interested in a takeover, one of which is controlled by the company's Chairman and well-known businessman, Steve Morgan.
While the offer of 152p a share represents a 23.8% premium to the 90-day average share price, the stock has risen strongly in recent weeks on speculation, closing yesterday at 151p.
First-half profits at restaurant and pub operator Restaurant Group came in slightly ahead of expectations, helping the firm to raised its interim dividend by an eighth. Shares edged higher from the off.
FTSE 100 - Risers
Kazakhmys (KAZ) 606.00p +3.32%
Glencore International (GLEN) 368.25p +3.02%
Johnson Matthey (JMAT) 2,426.00p +2.88%
Weir Group (WEIR) 1,642.00p +2.56%
IMI (IMI) 862.50p +2.43%
Fresnillo (FRES) 1,580.00p +2.40%
Randgold Resources Ltd. (RRS) 6,325.00p +2.35%
Aggreko (AGK) 2,359.00p +2.34%
Xstrata (XTA) 922.10p +2.34%
Petrofac Ltd. (PFC) 1,495.00p +2.33%
FTSE 100 - Fallers
Carnival (CCL) 2,152.00p -1.51%
Whitbread (WTB) 2,127.00p -0.70%
WPP (WPP) 814.50p -0.49%
Admiral Group (ADM) 1,157.00p -0.43%
Centrica (CNA) 330.10p -0.42%
Sainsbury (J) (SBRY) 331.10p -0.42%
National Grid (NG.) 690.50p -0.36%
Severn Trent (SVT) 1,750.00p -0.34%
Next (NXT) 3,608.00p -0.28%
Hargreaves Lansdown (HL.) 616.00p -0.16%
FTSE 250 - Risers
Ferrexpo (FXPO) 167.40p +5.22%
Centamin (DI) (CEY) 79.15p +4.42%
Avocet Mining (AVM) 90.45p +4.27%
Cairn Energy (CNE) 285.60p +4.23%
Michael Page International (MPI) 364.20p +4.03%
Mondi (MNDI) 565.00p +3.86%
Heritage Oil (HOIL) 199.50p +3.64%
AZ Electronic Materials SA (DI) (AZEM) 311.20p +3.53%
New World Resources A Shares (NWR) 278.30p +3.50%
Ashtead Group (AHT) 285.00p +3.15%
FTSE 250 - Fallers
Bwin.party Digital Entertainment (BPTY) 94.95p -4.09%
JD Sports Fashion (JD.) 664.50p -3.06%
Gem Diamonds Ltd. (DI) (GEMD) 169.00p -2.37%
Ocado Group (OCDO) 60.35p -2.11%
Hochschild Mining (HOC) 431.10p -2.02%
Daejan Holdings (DJAN) 2,994.00p -1.67%
Dechra Pharmaceuticals (DPH) 498.50p -1.29%
Murray Income Trust (MUT) 662.50p -0.97%
Phoenix Group Holdings (DI) (PHNX) 491.30p -0.91%
Ruspetro (RPO) 123.00p -0.89%
WHAT THE BROKERS SAY
Credit Suisse has reduced its target price for British Airways and Iberia owner International Consolidated Airlines Group, otherwise known as IAG, saying that consensus forecasts for 2013 look 'very vulnerable'.
Nomura reduced its target prices for a group of iron ore producing stocks on Friday on the back of falling prices but has highlighted BHP Billiton as its sector preference.
Utilities giant SSE is enjoying 'better growth at lower risks', according to UBS which upgraded its recommendation for the stock from 'neutral' to 'buy' on Friday morning.
Click here for the rest of the broker recommendations
THE LATEST ON THE CRAZY BOARD
The top 5 hot company threads on the Bulletin Board:
PUNTLAND - RANGE HIT MASSIVE OIL COLUMN - PL
KURDISTAN-TXO JOIN GULF KEYSTONE WITH 10% STAKE
RED EMPEROR RESOURCES(RMP)-RANGE shadow?
RANGE RESOURCES(RRL) - Worth a Punt in Puntland?
Falklands oilers soften on Seymour Pierce Note
Click here to discuss shares with other ShareCrazy members
BOOK OF THE WEEK
By Rodney Hobson
A book review by Luka Lukic of t1ps.com
In this book Rodney Hobson aims to provide a straight forward introduction into the world of portfolio management and best practices to employ when selecting what you want to invest in. Thankfully it doesn't pretend to offer a guaranteed, one size fits all, scheme to become a millionaire, but instead attempts to compel the reader to assess what they wants to get out of their investment and then provides guidance to that end.
The book aims to explain the different behaviours of the various market sectors, and the importance of not only holding a range of shares, but diversifying them throughout the sectors to ensure a proper hedge. It also walks the reader logically through a range of factors than can, and most likely will, affect the share price and gives case studies to demonstrate the impact on real companies.
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Regards,
ShareCrazy
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