Thursday 27 September 2012
QUOTE OF THE DAY
Don't stay in bed, unless you can make money in bed
- George Burns
THIS MORNING IN LONDON
FTSE 100
5,791.16
23.07 0.40%
FTSE 250
11,742.18
4.30 0.04%
FTSE 350
3,085.64
10.82 0.35%
FTSE All Share
3,020.59
10.49 0.35%
AIM 100
3,188.11
8.79 0.28%
AIM All Share
702.77
1.08 0.15%
11:50 am
Rally revives after GDP data
Footsie was close to squandering the gains it won in a bright start until better than expected UK gross domestic product figures came to the market's rescue.
Second quarter gross domestic product contracted at a 0.4% quarter-on-quarter rate of change, a revision to the previous estimate of a 0.5% decline. The market had been expecting no change to the previous estimate.
The news was less good on the UK trade front, with the current account deficit widening to an unprecedented £20.8bn in the second quarter from £15.4bn in the previous three month period.
Miners are back in fashion today, after China's central bank pumped record amounts of liquidity into the banking system this week. Rio Tinto, Xstrata and Anglo American were among the big gainers.
In company news, sweeteners group Tate & Lyle said first half adjusted operating profit will be similar to last year's level, in line with expectations. The company saw an improved performance in the second quarter in its Speciality Food Ingredients business. "Overall, while recognising the current level of uncertainty around the wider economy and volatile corn markets, we continue to expect to make progress this financial year," the group said.
Sticking with the food theme, contract caterer Compass said expectations for the full year remain unchanged after a strong performance in the fourth quarter as its US and emerging markets continue to underpin growth. In an update ahead of its annual results, Compass said constant currency revenue growth for the year to September 30th 2012 is expected to be around 8% and organic revenue growth should be 5.5%. Operating profit is expected to increase 8%.
Package tour operator TUI Travel is flying high after it said it remains on track to meet its full year expectations, following strong trading in the summer high season, with improved margins and load factors versus the prior year.
The reshaping of Aviva under Executive Chairman John McFarlane continues apace, with the insurance titan announcing the sale of its controlling interest in its Sri Lankan joint venture, Aviva NDB Holdings Lanka.
Pharmaceuticals colossus Shire is in rude helath after Jefferies Hoare Govett upgraded the stock from "hold" to "buy", and moved the target price up to 2400p from 2100p.
"We anticipate upcoming news to potentially boost expectations for Shire's longer-term organic growth prospects," the broker said, while it sees fewer risks to the firm's lucrative attention deficity hyperactivity disorder (ADHD) franchise from competitors peddling generic versions of Shire's drugs.
Other markets
Metals prices rose on the futures markets but ended the morning session off their best levels. The most actively traded gold contract is up $2 to $1,755.60 an ounce, while the copper counterpart is up $1.95 to $372.95 a pound.
Brent crude for November delivery is 30 cents dearer at $110.34 a barrel in early London trading.
Investors turn their backs on gilts to ride the equities rally. The yield on the benchmark 10-year gilt is up to 1.72% from 1.69% overnight. Yields move inversely to prices.
FTSE 100 - Risers
Shire Plc (SHP) 1,839.00p +2.45%
Tate & Lyle (TATE) 669.50p +2.29%
Anglo American (AAL) 1,866.00p +1.91%
Glencore International (GLEN) 344.25p +1.71%
Rio Tinto (RIO) 2,888.50p +1.67%
Barclays (BARC) 217.15p +1.64%
Xstrata (XTA) 970.80p +1.52%
Lloyds Banking Group (LLOY) 39.41p +1.32%
HSBC Holdings (HSBA) 581.00p +1.27%
Hargreaves Lansdown (HL.) 632.00p +1.20%
FTSE 100 - Fallers
Compass Group (CPG) 701.50p -1.41%
Serco Group (SRP) 578.00p -1.20%
Pennon Group (PNN) 722.00p -0.89%
Royal Dutch Shell 'A' (RDSA) 2,159.00p -0.85%
Whitbread (WTB) 2,251.00p -0.84%
G4S (GFS) 262.80p -0.83%
Reed Elsevier (REL) 596.50p -0.75%
RSA Insurance Group (RSA) 112.30p -0.71%
Carnival (CCL) 2,283.00p -0.70%
Morrison (Wm) Supermarkets (MRW) 288.00p -0.66%
FTSE 250 - Risers
NMC Health (NMC) 188.33p +4.57%
Talvivaara Mining Company (TALV) 152.10p +2.98%
Dairy Crest Group (DCG) 342.70p +2.94%
Shanks Group (SKS) 81.30p +2.91%
Fidelity China Special Situations (FCSS) 72.00p +2.42%
International Personal Finance (IPF) 302.60p +2.40%
Ruspetro (RPO) 110.00p +2.23%
New World Resources A Shares (NWR) 277.80p +2.06%
FirstGroup (FGP) 252.30p +1.98%
TUI Travel (TT.) 234.30p +1.83%
FTSE 250 - Fallers
JD Sports Fashion (JD.) 705.50p -3.36%
Perform Group (PER) 382.10p -3.02%
Supergroup (SGP) 613.50p -2.62%
Hays (HAS) 78.50p -2.24%
Domino's Pizza Group (DOM) 528.50p -2.22%
Dunelm Group (DNLM) 636.00p -2.08%
Ladbrokes (LAD) 175.90p -1.95%
Spectris (SXS) 1,696.00p -1.91%
Regus (RGU) 100.90p -1.85%
Ferrexpo (FXPO) 193.60p -1.78%
FTSE TechMARK - Risers
DRS Data & Research Services (DRS) 18.00p +4.35%
Sepura (SEPU) 80.75p +4.19%
FTSE TechMARK - Fallers
RM (RM.) 77.25p -4.48%
Hiwave Technologies (HIW) 1.70p -4.23%
TIP OF THE DAY
A report by GECR
- Quindell Portfolio is a leading provider of software, consulting and outsourcing services to a broad portfolio of clients, primarily in the insurance and telecommunications sectors.
- Significant Growth - Since our overview note, Quindell has announced three further acquisitions and a major contract win.
- Strong Interims - On 4th September 2012 the group announced strong interim results, which highlighted considerable revenue and adjusted EBITDA growth, among other developments.
- Future Opportunities - As we stressed in our overview note, Quindell has over £500 million of contracts currently under discussion.
- Upgraded Forecasts - In light of recent announcements, we have upgraded our revenue forecast for 2013 to £252 million from £247 million, and upgraded our 2012 and 2013 Adjusted EPS forecasts to 1.04p and 1.79p from 0.98p and 1.57p, respectively.
- We recommend the shares as buy at 10.25p with an upgraded 25p target price.
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THE LATEST ON THE CRAZY BOARD
The top 5 hot company threads on the Bulletin Board:
GAL
Black Mountain
Falkland Oil & Gas
Imagination Technology
The Running Trading Thread
Click here to discuss shares with other ShareCrazy members
BOOK OF THE WEEK
By John Cassidy
A book review by Ross Jones
I am very interested in behavioural economics and have therefore read quite a few books covering similar subjects to what John Cassidy, a writer for the New Yorker, looks to address in his book How Markets Fail: The Logic of Economic Calamities. However, none of the other books I have read come close to the excellent way in which Cassidy analyses the roots, the progression and the ultimate outcome of the US credit bubble. Unlike other books, Cassidy does not just focus on the events which unfolded immediately before the collapse, but traces the origins of economic thought and ideas right back to Adam Smith's 18th century invisible hand teachings, and analyses exactly why and more importantly, how, the credit bubble occurred and subsequently popped.
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