Thursday 6 September 2012
QUOTE OF THE DAY
If you break 100, watch your golf. If you break 80, watch your business
- Joey Adams
ON THE SHARECRAZY BLOG
If one listens to the BBC or reads the Guardian the wicked Tories are slashing public spending. These means real cuts to front-line services which means the poorest and weakest folks in society really suffering. Ahem…it is just not true.
The facts are that Government spending is increasing in real terms (and per head of population in real terms) year on year and will continue to do so throughout this Parliament. And since tax receipts are patently not going up as fast (indeed I suspect at all) that means that the UK Government deficit and UK national debt will continue to increase. At one stroke the wicked Tories both enrage the lefties but actually do nothing to sort out the economic mess we are in.
As to those front line services, well it is all down to where the money allocated to various departments and local authorities is actually spent. You might, for instance, have thought that there was a pay freeze in the public sector. Think again. It appears that a large percentage of state employees are actually on contracts giving guaranteed annual rises. Lucky them. Meanwhile many of the rest work under a deal where their salary is in fixed bands. So a climate change outreach officer might work in a band of GBP30,000 - GBP40,000. The bands have been frozen but folks are still getting hikes by just moving up those bands.
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THIS MORNING IN LONDON
FTSE 100
5,690.15
32.29 0.57%
FTSE 250
11,537.47
91.40 0.80%
FTSE 350
3,031.81
18.11 0.60%
FTSE All Share
2,967.24
17.43 0.59%
AIM 100
3,085.75
-10.23 -0.33%
AIM All Share
683.76
-0.36 -0.05%
11:54 am
All eyes turn to Draghi as BoE holds rates
- All eyes on the ECB and Draghi
- BoE keeps rates and QE unchanged
- Economic data from the US also in focus
Just a handful of stocks on London's Footsie were in the red by Thursday lunchtime as markets geared up to a pivotal policy announcement by the European Central Bank (ECB).
The UK's Monetary Policy Committee (MPC) did what was largely expected and maintained its Bank Rate at 0.5% and asset purchase programme at GBP375bn in its policy announcement at noon. The Bank of England injected GBP50m of additional quantitative easing in July which is not due to be completed until the end of October.
All eyes are on ECB President Mario Draghi who is expected to reveal details of the bank's bond-buying programme to bring down yields in peripheral nations.
"The markets have been buoyed by Draghi's original comments for more than a month now so anything short of total commitment by the ECB and full disclosure of the details is likely to be received with disappointment," said analyst Craig Erlam from Alpari.
According to media reports yesterday afternoon, unnamed central bank officials have said that Draghi will announce unlimited purchases of short-dated government debt (with maturities of up to three years) that will be sterilised, though the ECB would refrain from setting a public cap on yields.
However, according to Michael Fuchs from Merkel's Christian Democratic Union party yesterday, Germany would oppose the ECB's bond-buying plan if it purchases "too much" sovereign debt without ensuring that these nations agree to strict conditions.
While the ECB decision will undoubtedly be the 'big event' of the day, markets will also be watching some key economic data from the US - non-farm payrolls, jobless figures, ISM non-manufacturing - which could affect next week's decision from the Federal Reserve on whether of not to print more money.
FTSE 100: Whitbread and Morrisons impress early on
Hotel, restaurant and Costa coffee owner Whitbread jumped in the opening hour after reporting second-quarter sales growth of 14.8%, up from 13.9% in the first three months of the year. Investec said that the Whitbread "offers compelling value for a stock with impressive roll-out potential, strong asset backing and impressive trading momentum."
Supermarket group Morrisons also rose after pre-tax profits in the first half came in 3% ahead of consensus estimates. Jefferies said this morning that the stock is trading at an "unjustified" discount to supermarket peers in the UK and Europe.
Mining stocks were also in demand early on with investors hoping that additional stimulus measures in Europe could provide a boost to the global economy. Antofagasta, Fresnillo and Vedanta were among the best performers while Randgold was gaining as gold prices rose to a five-month high.
Car insurer Admiral was among the few stocks registering losses as shares continue to fall following the group's first-half results last week. Exane BNP Paribas reiterated its 'underperform' rating on the stock this morning.
FTSE 250: Lonmin gains on union deal
South Africa-focused platinum miner Lonmin rose strongly on reports that it has reached an agreement with some of its labour unions following a wave of protests over the last few weeks.
Electrical retailer Dixons rose after saying it made an "encouraging" start to the year with decent growth in the UK, Ireland and Northern Europe, though trading in Southern Europe continues to be tough.
easyJet gained after reporting that it carried 6% more passengers in August. Yesterday the firm also announced that it would introduce allocated seating in its planes.
FTSE 100 - Risers
Whitbread (WTB) 2,205.00p +5.05%
Randgold Resources Ltd. (RRS) 6,760.00p +4.72%
Antofagasta (ANTO) 1,138.00p +3.83%
Polymetal International (POLY) 993.50p +3.81%
Vedanta Resources (VED) 903.00p +2.96%
Evraz (EVR) 217.70p +2.93%
Eurasian Natural Resources Corp. (ENRC) 304.70p +2.90%
Fresnillo (FRES) 1,682.00p +2.69%
Morrison (Wm) Supermarkets (MRW) 288.20p +2.67%
Rio Tinto (RIO) 2,784.00p +2.43%
FTSE 100 - Fallers
Imperial Tobacco Group (IMT) 2,378.00p -1.16%
Burberry Group (BRBY) 1,314.00p -0.98%
Tate & Lyle (TATE) 645.50p -0.92%
Admiral Group (ADM) 1,119.00p -0.62%
Smith & Nephew (SN.) 669.50p -0.52%
Croda International (CRDA) 2,418.00p -0.45%
Shire Plc (SHP) 1,934.00p -0.41%
Vodafone Group (VOD) 175.80p -0.40%
AstraZeneca (AZN) 2,911.00p -0.34%
British Sky Broadcasting Group (BSY) 757.50p -0.33%
FTSE 250 - Risers
Lonmin (LMI) 558.00p +5.38%
Avocet Mining (AVM) 91.10p +4.95%
Centamin (DI) (CEY) 81.25p +4.43%
New World Resources A Shares (NWR) 283.90p +4.41%
Ferrexpo (FXPO) 153.80p +4.27%
Aquarius Platinum Ltd. (AQP) 35.90p +4.06%
Barr (A.G.) (BAG) 467.80p +3.91%
Travis Perkins (TPK) 1,068.00p +3.69%
NMC Health (NMC) 192.30p +3.39%
Taylor Wimpey (TW.) 56.20p +3.31%
FTSE 250 - Fallers
Ruspetro (RPO) 120.30p -2.12%
Menzies(John) (MNZS) 612.50p -1.84%
Britvic (BVIC) 363.20p -1.81%
Bumi (BUMI) 265.60p -1.15%
Dunelm Group (DNLM) 572.00p -1.12%
Rank Group (RNK) 129.10p -1.07%
PayPoint (PAY) 700.00p -1.06%
JPMorgan Asian Inv Trust (JAI) 175.00p -1.02%
Home Retail Group (HOME) 96.30p -0.98%
Ted Baker (TED) 965.00p -0.92%
WHAT THE BROKERS SAY
FREE SHARE TIP OF THE DAY
An extract from the diaries of infamous bear raider Evil Knievil
August 31st 2012
Billing Services (BILL) today announces the acquisition of Connection Services Holdings Ltd. For a company that is supposed to be dead Billing is not behaving that way.
Admiral (ADM) seems to be slowing down. Its overseas ventures are not yet paying off and competition is hotting up in the UK. The prop to the price is the dividend. But that can be cut.
Barclays (BARC) is quite resilient on the news of the SFO investigation into the fund-raising based on the Qataris. This suggests that the public accepts that the worst is out. All this makes Barclays look very cheap at, say, less than 200p.
A N Other bet on Valyra for the Arc at about 9.45 a.m. last Wednesday. Valyra had died probably no later than 7.00 a.m. that morning. These facts emerged about eight hours later. On the principle that where the punter cannot win he cannot lose A N Other's money is safe. The bookmaker has yet to account. We'll see.
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THE LATEST ON THE CRAZY BOARD
The top 5 hot company threads on the Bulletin Board:
Reed Elsevier
Falkland Oil & Gas
Conroy Gold
IQE
Running trading thread
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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