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From UK-Analyst.com: Tuesday 11th December 2012
The Markets The Confederation of British Industry (CBI) has launched an attack on a proposed European scheme aimed at strengthening pension finances, arguing it will lead to thousands of job cuts. The initial proposal outlined by the European Commission in 2010 aimed to make pension schemes more robust if a firm were to go bust. However, the CBI said the plans were unnecessary and overly costly - the government is now pushing for the plans to be dropped. Katja Hall, CBI chief policy director said, "imposing 350 billion pounds more costs on business would be a disaster for the economy and for pension saving". Staying in the UK, figures from the Royal Institution of Chartered Surveyors (RICS) suggest that British house prices fell faster than expected in November after dropping at the slowest pace in more than two years in October. The RICS seasonally adjusted house price balance fell to -9 in November from -7 in October indicating a more negative picture in the market. In response to these figures, Peter Bolton King, RICS global residential director said, "the macroeconomic picture continues to weigh heavy on the market and continues to prevent any really significant boost in activity". In the US, the pace of talks quickened as governors try to avert the "fiscal cliff" of spending cuts and steep tax hikes but the two parties involved warn that an agreement is still uncertain. Republicans and Democrats are not close to finalising a deal, with the top Democrat on the House Budget Committee, Chris Van Hollen, saying some of the issues may not be resolved until January. Van Hollen commented, "if not complete in December, my belief is you would get it done very soon [after the new year]." At the London close the Dow Jones was up by 120.62 points at 13,290.50 and the Nasdaq grew by 47.59 points to 2,695.16 In London the FTSE 100 increased by 3.34 points to 5,924.97; the FTSE 250 finished 12.43 points up at 12,190.58; the FTSE All-Share gained 1.83 points to 3097.63; and the FTSE AIM Index crept up by 1.4 points to 687.80..  Broker Notes Canaccord Genuity reiterated its "sell" stance on Pace (PIC), the satellite technology company, with a target price of 150p. The broker believes that the potential acquisition of Google's Motorola Home division in a reverse takeover would need to be financed with an "eye-watering" amount of debt. It added that any agreement would treble the exposure of the threat that its residential set-top box will become obsolete over the next 5-10 years. The shares remained suspended at 185.3p. Panmure Gordon maintained its "buy" recommendation on online gambling firm Sportech (SPO) with a target price of 71p. This reiteration comes on the back of the announcement that the company has been granted permission to exclusively operate online betting in the state of Connecticut on all horse racing. This current market represents exclusivity to an approximate 3.7 million gamblers in the state and the broker believes this is a significant step forward for the firm. The shares gained 2.25p to 69.25p. N+1 Singer maintained its "sell" recommendation on Carpetright (CPR) with a target price of 410p. The broker notes that pre-tax profits for the 6 months ended 13th October came in at 4.5 million pounds, 0.5 million pounds lower than its own forecasts, and that the company is paying no dividend. The broker believes that measures which management have put in place over the last 12-18 months have been insufficient to offset a fundamentally weak market and that the recent 40% share rally has been unjustified. The shares inched up by 1p to 667.5p. 
Blue-Chips Hotel and restaurant group Whitbread (WTB) announced 14.3% growth in total sales for the 39 weeks ended November 29th, driven by a 25.3% increase in sales at Costa Coffee. The group's Premier Inn hotel business also performed well, showing 12.6% growth in total sales and a 3.3% increase in like-for-like sales over the period. The company attributed this to the idea that cost conscious customers were loyal to its rooms in tough economic times. The shares climbed by 60p to 2,488p, and have now gained more than 50% over the past year. Leisure industry guru Mark Brumby of Langton Capital commented, "...we believe that some profit-taking is possible, particularly as the group has highlighted the fact that growth rates are likely to moderate."Â Oil giant Tullow Oil (TLW) has acquired Norwegian firm Spring Energy in a deal worth 372.2 million dollars (231.5 million pounds). Spring Energy boasts 28 offshore licenses across Norway's Continental Shelf, with existing resources of 24 million barrels of oil equivalent. The firm also reported it is disposing of its production assets in the UK and Dutch North Sea as it continues its policy of monetising its non-core assets. Separately, the firm announced that the Okure-1 exploration well, drilled in the Deepwater Tano licence area in Ghana encountered "non reservoir quality formations" and that it has let its current Guyana licence expire as it evaluates other opportunities in that region.. The shares tumbled by 106p to 1,150p. Banking group HSBC (HSBA) will pay 1.2 billion pounds to settle probes regarding the group's "inadequate compliance" with anti-money laundering and sanctions laws. The investigation centred on the transfer of billions of dollars on behalf of nations such as Iran and North Korea (which are both under international sanctions) and also the transfer of money through the US financial system from Mexican drug cartels. The news comes after last month's announcement that the bank had set aside 933 million pounds to cover the costs of any settlements or fines. The shares were up by 3.6p at 644.8p. 
Mid Caps Equipment rental firm Ashtead Group (AHT) announced 16% growth in revenues to 355.4 million pounds and a 56% rise in pre-tax profits to 79.3 million pounds for the three month period ended 31st October. The company attributed the growth to a strong performance in fleet on rent and an increased yield in the US. As a result, the interim dividend will be 1.5p per share, up from 1p last year. The shares slipped by 0.8p to 389.7p despite Ashtead adding that profits will be ahead of market expectations for the full year. Financial spread betting operator IG Group (IGG) announced a 14% slide in revenues to 169 million pounds for the 6 months ended 30th November. The group cited extreme levels of volatility in the financial markets and continuing subdued markets which impacted client activity. Activity in Japan was hit relatively hard as active clients fell by 29% and revenue per client fell by 28%. In reaction, the group has reduced some planned marketing spend, deferred recruitment and made headcount reductions. The shares lost 9.6p to 427.2p. Domino Printing Sciences (DNO) declared a 1% slide in revenues to 312.1 million pounds and a 6% fall in pre-tax profits to 53.9 million pounds for the year ended 31st October. The barcode-printer maker attributed the slump in results to customers cutting down on investments in new capacity amid economic uncertainty in Europe. The company also stated that it had received a significantly lower amount of orders from China and warned that 2013 market conditions would again be uncertain and unstable. The shares lost 39p to close at 571p. Small Caps & AIM Gold exploration company Ovoca Gold (OVG) has agreed to sell its 100% interest in subsidiary Olymp Limited, a company which holds a mining and exploration license for the Olcha Gold-Silver deposit in Russia, to a subsidiary of Polymetal International. The amount payable under the agreement is 775,000 Polymetal ordinary shares, which values the deal at 8.4 million pounds. It is thought that the board will hold on to the shares as a medium-term investment while the company continues to focus on its other projects in Russia. The shares jumped by 2.8p to 12.3p. Developer of diagnostic screening and testing products, Akers Biosciences (AKR) has received a purchase order to manufacture 3.5 million units of a custom breath alcohol detector for (1.05 million dollars) 653,000 pounds. The product is disposable and is being targeted at the French market through the company's distribution partner Sono. France has been strategically chosen because of the 30 million cars in the country owned by French citizens and the fact that France is the most visited country in the world, with 81 million people visiting in 2011. The shares surged by 0.13p to 0.93p. Clean technology company Ilika (IKA) has renewed and extended the scope of a contract with an existing customer, to develop lithium-ion battery technology, to its fifth successive year. The order value of the renewal is 330,000 pounds, which corresponds to around 20% of the group's total expected revenue for the current financial year. The company also said that further discussions are on-going regarding a different agreement which is expected to yield a similar sized order within this financial year. The shares swelled by 2p to 26p. 
Zytronic (ZYT), the developer of touch sensors, reported a 18% increase in pre-tax profits to 4.2 million pounds for the year ended 30th September despite revenues remaining flat at 20.4 million pounds. The firm, which specialises in touch screens, has been concentrating on product development and has been taking its multi-touch, multi user, mutual projected capacitive technology touch products to global technology exhibitions. As a consequence of the increase in profits the board has increased dividends for the year by 10% to 8.5p. The shares fell by 27p to 318p. ASOS (ASC), the online fashion retailer, announced a 30% increase in sales revenues to 169.4 million pounds for the 3 month period ended 30th November. The highest percentage growth exhibited by a region was 57%, to 19 million pounds, in the US. ASOS also cited investments in pricing and proposition as significant factors for a 24% rise in sales revenue in the UK. In addition, the firm boasted a 35% increase in active customers over the period, bringing the amount of people that use the site to 5.4 million. ASOS shares gained 82p to 2,546p. While many City analysts have a "sell" rating on the stock, broker Panmure Gordon has a "buy" rating and a 2,875p target price. Smart energy company Bglobal (BGBL) declared a 30% dive in revenues to 7.28 million pounds for the 6 months ended 30th September 2012, while pre-tax profits grew to 160,000 pounds from 120,000 pounds. This drop in revenues was primarily driven by a significant fall in meter installations due to a slowing in the industrial and commercial market as the company looks to expand into the residential market. The shares remained flat at 11.75p.
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