| The Markets The Bank of England slashed its growth forecast for the UK economy from 0.8% to close to zero for 2012 over fears that Europe's debt crisis will continue to quash any hopes of a recovery. Governor Sir Mervyn King also admitted that growth would be difficult to forecast over the coming year, since no-one could predict what would happen in the Eurozone and the extent of its effect on the UK. The data fuelled the argument that interest rates should be lowered to 0.25%, however this was quickly dismissed by the Governor. Meanwhile, in Paris, the Bank of France conceded it expects the French economy to move back into recession after predicting contractions of 0.1% in both the second and third quarter of the year. The forecasts comes on the back of growing concern that the debt woes of fellow Eurozone nations Greece, Spain and Italy will hit business and consumer confidence. At the London close the Dow Jones was up by 33.11 points at 13,201.71 and the Nasdaq was up by 3.45 points at 2,720.61.
In London the FTSE 100 rose by 4.68 points to 5,845.92; the FTSE 250 finished 24.50 points behind at 11,436.44; the FTSE All-Share gained 1.48 points to 3,031.41; and the FTSE AIM Index rose by 0.31 points to 683.12. 
Broker Notes Panmure Gordon reiterated its "sell" recommendation for SThree (STHR) with a 212p target price. The broker significantly reduced its full year pre-tax profit forecast for the recruitment agency, from 30.3 million pounds in the year ending November 2013 to 24.9 million pounds, in light of continued deterioration in trading conditions during the second quarter. Additionally, Panmure believes the firm may choose to maintain its dividend for both 2012 and 2013, instead of the previously expected 5.1% increase. The broker also noted that the shares trade on a prospective earnings multiple of over 20 times for 2012. Shares in SThree inched down by 1.5p to 272.25p. Singer Capital downgraded its stance on Spirent Communications (SPT) from "buy" to "fair value", with a reduced target price of 157p, from 175p. The telecommunications tester's poor first half performance and weak outlook led the broker to lower its pre-tax profit forecasts by 6% for each of the next three financial years. Singer added that a number of the firm's clients, such as ZTE and Huawei, have lowered their second half targets. On the broker's revised forecasts, the shares trade on a prospective earnings multiple of 15.7 times for the 2012 financial year. The shares were unchanged at 144p. N+1 Brewin maintained its "add" rating for Zotefoams (ZTF) with a target price of 200p. The foam blocks manufacturer reported first half sales growth of 9.9% to 24.8 million pounds, in-line with the broker's forecasts. Brewin noted that this included 80% growth from its High Performance Polymers division, driven by demand from the aerospace sector. The broker also has high hopes for the group's MuCell Extrusion business, which the group has invested heavily in and has formed a collaboration with Dow Performance Packaging. Shares in Zotefoams stayed flat at 175.5p. Blue-Chips Rio Tinto (RIO) reported underlying earnings of 5.2 billion dollars (3.3 billion pounds) for the six months ended 30th June which, although 34% below 2011's comparable period due to price weakness, was ahead of market forecasts. The mining giant attributed the strong performance to its low cost business model, pointing to its Pilbara operation which has one of the highest margins in the industry. Separately, the group announced that it will close its Blair Athol coal mine in Australia after nearly 30 years of production, stating that the mine has finally run dry. The shares advanced by 89.5p to 3,220p. 
Financial services group Old Mutual (OML) announced plans to expand its operations in Africa, where it enjoyed growing sales and margins, through the acquisition of Nigerian life insurance firm Oceanic. A strong performance from its South Africa business helped drive adjusted operating profits past market expectations of 776 million pounds, to 791 million pounds in the first half of its financial year. However, the firm noted difficult conditions for its European Wealth Management division, with the Euro uncertainty impacting consumer confidence. Shares in Old Mutual slipped by 0.4p to 169.4p. BP (BP.) has agreed to sell its UK liquefied petroleum gas distribution business to Irish conglomerate DCC (DCC) for a cash consideration of 63 million dollars (40.5 million pounds). The division operates from 13 hubs across the country, with annual sales of around 87,000 tonnes of bulk and cylinder LPG. The news follows on from the oil and gas giant announcing plans to dispose of a number of LPG business, including in the UK, Austria, South Africa and China. The shares leaked 2.85p to 450.95p. Mid-Caps BTG (BTG) announced that a Phase IIb study of its CytoFab treatment for sever sepsis and septic shock established that it performed no better than a placebo. The healthcare group said that it will cease development of the product and therefore expects to incur a 28 million pound impairment charge in the current financial year. Despite an initial fall of around 10%, the shares finished 5p ahead at 343p. 
Cobham (COB) reported a disappointing first half performance, with order intake falling 21% year-on-year to 768 million pounds and revenues down by 5% at 843 million pounds. The aerospace engineer raised concerns over US defence spending due to the high level of uncertainty relating to the future budget in the wake of government cuts. However, the firm said that it enjoyed positive trends in the emerging markets, such as India and the Middle East, with high hopes for surveillance sales in Brazil as it prepares to host the 2014 football World Cup and 2016 Olympics. The shares tumbled 12.8p to 225.7p. Having previously released a steady stream of bad news, Aquarius Platinum (AQP) announced an unsurprisingly weak performance for the year ended 30th June, with revenues falling by 29% to 486 million dollars (311.7 million pounds) and a pre-tax loss of 185 million dollars (118.7 million pounds). The miner suffered from weakening metals prices, with platinum falling 16% to 1,428 dollars (916 pounds) per ounce at the year end, palladium down 23% and rhodium down 32%. As a result, the firm was also forced to suspend a number of its operations as they had become uneconomical to run. Shares in Aquarius declined by 0.45p to 36.23p. Small Caps, AIM and PLUS Eastern Europe focused Orogen Gold (ORE) provided an update on its exploration programme at the Deli Jovan gold project in eastern Serbia, confirming that 3,800 metres of its 7,500 metre drill programme have been completed on schedule. Logging and sampling of core is progressing well and a batch of samples have been dispatched to a laboratory in Romania for assay testing, the results of which will be released to the market upon the company's receipt. Orogen shares climbed 0.375p to 0.5575p. Staying with precious metals, Sovereign Mines of Africa* (SMA) unveiled positive results from the second phase of drilling at its Mandiana-Magana old project in Guinea, highlights of which included a 6 metre intersection of 10g/t gold and a 30 metre interval of 3.25g/t gold. With 34 out of 35 drill-holes intersecting gold mineralisation, the results of the campaign extend the known gold mineralisation discovered by the company last year at the site. The shares rose by 0.25p to 4.875p. Online consumer electronics retailer eXpansys (XPS) reported a 27% jump in pre-tax profits to 4.3 million pounds for the year to April on the back of a 33% climb in sales to 108.5 million pounds. The group, now operating in 51 countries, was able to achieve strong top and bottom line growth thanks to a 'clear strategic focus' as well as improved execution across all of its business units. The firms success delivered organic like-for-like growth of 81% for its own-branded site eXpansys.com as a result of a stronger focus on efficient traffic generation and improved conversation rates. The group also confirmed that with a strong cash position of 5.5 million pounds it is now looking to make further acquisitions and seek opportunities in the emerging markets of Asia. eXpansys shares closed 0.05p lower at 1.275p. 
In the oil and gas sector, Max Petroleum (MXP) reported it has entered into an agreement with Zhanros Drilling, one of its drilling contractors, which will see Zhanros fund up to 7 million dollars of drilling and workover services in exchange for shares. Under the agreement, Max will issue up to 90,322,581 ordinary shares to Zhanros at 5p per share, a premium of 25% to the pre-announcement share price. Max Petroleum expects to begin drilling the BCHW-1 well on the Baichonas West prospect using Zhanros' ZJ-20 drilling rig currently on location, and hopes to spud the well in approximately one week. Max shares jumped 0.45p to 4.2p. Despite news of a maiden 2.2 billion tonne JORC compliant inferred coal resource at the Kweneng coal project in Botswanam, Continental Coal (COOL) shares inched 0.125p lower to 5.75p. The results of the first phase drilling programme confirm a further exploration target for Continental Coal in addition to its Serow coal projects, with the firm's assets now offering a combined inferred coal resource in excess of 9 billion tonnes. The group is now planning to commence a phase 2 drilling programme in a bid to further define the resources it holds under management. Patron Sport Holdings, the owner of Powerleague, has made the decision to terminate its interest in Goals Soccer Centres (GOAL), having confirmed in July that it would consider making a bid for the 5-a-side football centre business. The development means that all doors are open now for Ontario Teachers' Pension Plan controlled Goliath to complete a 144p price takeover of the company, an offer that has already been recommended by Goals' management. Goals shares slipped by 5.5p to 143.5p with disappointed investors initially hoping that a bidding war for the company was on the way. * Sovereign Mines of Africa is a corporate client of Rivington Street Holdings, the ultimate owner of UK-Analyst. | 
No comments:
Post a Comment