From UK-Analyst.com: Tuesday 18th December 2012
The Markets Consumer price inflation remained unchanged in the UK, at 2.7% in November, according to the Office for National Statistics. The price of cereals, fruit, bread as well as energy bills exhibited the largest increases, while the costs of fuel and plane tickets both fell. Rob Wood, economist at Berenberg Bank, commented, "UK inflation has paused for breath in November before it resumes its assault on the 3% mark over the next few months". Over in the US, slight progress has been made as talks on avoiding the "fiscal cliff" have gathered pace. It is reported that Barack Obama has called for 1.6 trillion dollars (1 trillion pounds) in tax revenue over 10 years but many Republicans are philosophically opposed to tax increases. In response, speaker of the house and Member of the Republican party said he would agree to just 1 trillion dollars (620 billion pounds) in tax revenues over the next 10 years. An agreement must be reached by January 1st if government is to avoid the "fiscal cliff" which economists believe could suck 600 billion dollars (370 billion pounds) out of the economy and plunge the country back into recession. Over in Ireland the country is preparing to take over the rotating EU presidency. Deputy Prime Minister Eamon Gilmore believes the way forward out of the crisis for Europe is to secure growth and jobs. Gilmore also stressed the importance of trade and confirmed his intentions to begin talks with Japan on a free trade agreement as well as starting negotiations with Washington over an agreement. Gilmore said on the prospect of an agreement with the US, "I know it is a priority for the US as well [as Europe]". At the London close the Dow Jones was up by 82.01 points at 13,317.40 and the Nasdaq grew by 28.61 points to 2,692.87. In London the FTSE 100 increased by 23.75 points to 5,935.90; the FTSE 250 finished 77.84 points up at 12,296.42; the FTSE All-Share gained 17.53 points to 3110.58; and the FTSE AIM Index crept up by 0.41 points to 690.94..  Broker Notes Seymour Pierce maintained a "buy" stance on India-based services group Mortice (MORT) with a target price of 73p. The broker is impressed with the 28% increase in security services revenue the company exhibited this year and believes that Mortice is in the process of gaining traction in the growing facilities management sector. This, according to the broker, underpins the significant growth potential of the business. The shares remained flat at 59p. N+1 Singer Initiated coverage with a "buy" recommendation on Oxford Pharmascience Group (OXP), with a target price of 238p. The broker believes that the company has successfully established a strong niche position in the over the counter (OTC) market and that it can use this as a springboard to enter into the larger generic drugs market. N+1 Singer is of the opinion that a recent 2 million pounds fundraise will help the company to open up new markets and geographical territories. The shares increased by 0.025p to 2.05p. Northland Capital initiated coverage of Alexander Mining (AXM) with a "buy" recommendation and a target price of 7.3p. The broker is impressed with the company's new base metal processing technology and believes it has the potential to transform the whole of the mining industry. The technology in question is the Ammleach process, which facilitates the treatment of high acid consuming ores containing copper, cobalt and zinc. At present, many of these deposits can not be treated by conventional methods due to the high acid consumption resulting in high costs; a problem that this technology negates. The shares remained flat at 4.75p. 
Blue-Chips Engineering giant Rolls Royce (RR.) has signed a 1 billion dollar (620 million pounds) contract with Japan's Skymark Airlines for its Trent 900 engines to power six Airbus A380 aircraft. The package also includes the provision of Rolls Royce's TotalCare service support product. This order means that 11 of the 16 airlines which have made an engine selection for the A380 have chosen the firm's Trent 900 engine. In addition, Skymark has signed a letter of intent for Trent 700 engines to power up to 10 leased Airbus A330's. The shares climbed by 20.50p to 880p. Mid Caps Property insurer Catlin Group (CGL) has estimated its Hurricane Sandy related losses to be in the region of 200 million dollars, net of reinsurance and reinstatements. However, the company acknowledged that this estimate is subject to a considerable degree of uncertainty due to the size of the storm system and the wide variety of damage it caused. The shares fell by 8.1p to 489.1p. Elsewhere, insurance group Hiscox (HSX) also estimated its losses from hurricane Sandy and predicted net claims of approximately 90 million pounds. The company stressed that this loss is well within its overall budgeted loss expectations for the year. The insurance market as a whole is expected to be subject to an insured market loss of 20 billion pounds because of the storm which tragically killed 253 people across the Caribbean and North America in October. The shares slipped by 3.1p to 465.9p. International support services group Interserve (IRV) has acquired Advantage Healthcare, a UK provider of healthcare at home services, for a cash consideration of 26.5 million pounds. The acquisition is in line with the company's strategy of widening its access to the 10 billion pounds UK community healthcare market . For the 2012 calendar year Advantage Healthcare is expected to report revenues of 41 million pounds and EBIT of 3 million pounds. The shares were up by 8.1p at 374.2p. 
Small Caps & AIM Manufacturer of visual and audio equipment Armour Group (AMR) posted an 18.7% drop in sales to 34.4 million pounds but a 29.4% reduction in losses to 1.2 million pounds for the year ended 31st August. The company attributed the performance to a weak economic environment, which particularly hurt its Home business. The company stressed that it returned to a profitable position in the first quarter of the current financial year but warned that the economic outlook, although improved, continues to be uncertain. The shares lost 0.25p to 2.25p. Outsourcing group Quindell Portfolio* (QPP) revealed that preliminary results for the year to December 2012 are expected to be significantly ahead of market expectations. This is a result of increasing sales revenues being transacted by the group's Services division, with pilots being converted into contracts and new sales made at a faster rate than expected. The group went on to confirm that it has received approval from the SRA to operate as an Alternative Business Structure for legal services. The shares were up by 1.75p at 14.25p. Fusionex (FXI), the enterprise software provider, enjoyed its first day of dealings on AIM. The company raised approximately 12 million pounds before expenses through the placing of 7,666,667 shares at 150p each. The net proceeds will be used to fund product development, expand sales capabilities and provide additional working capital. In the 12 months to 30th September the company generated revenues of 10 million dollars and an after-tax profit of 4.2 million dollars. The shares ended the first day of trading at 190p.
Oil and gas exploration company Leyshon Resources (LRL) announced that tests by its wholly owned subsidiary Pacific Asia Petroleum have confirmed that pay zones in well ZJ55 will require stimulation to produce commercial flows. Leyshon had hoped that the well in China's prolific Ordos basin would yield commercial gas flows without a frack but the testing showed that there was insufficient flow for this. The company downplayed the impact of this and pointed to its $45 million (27.8 million pounds) in cash, which underpins its long-term growth strategy. The shares plummeted by 5p to 14.25p. Legendary Investments (LEG) announced that investee, Emerick Resources, has acquired Medgold Resources by way of a reverse takeover, with Medgold's shareholders retaining 61.6% of the enlarged company. Medgold Resources is a Mediterranean-focused gold explorer targeting countries primarily with historic production levels. Legendary invested in Medgold in July 2011 and the closing price of 0.24 Canadian Dollars (0.15 pounds) reached yesterday at close of trading represents a 180% return on the firm's original investment. The shares increased by 0.015p to 0.11p. Redstone (RED), the provider of managed solutions, announced the renewal of three major contracts. Firstly, Redstone has been awarded an extension of its managed WAN deal with a leading UK retail chain, worth 660,000 pounds in revenue over the life of the contract. Secondly, an undisclosed English non-departmental public body renewed its Oracle e--business application and technical systems managed support contract which is worth 352,000 pounds over the course of the contract. Lastly, the company has signed a 3 year extension on a managed services contract with a "major" manufacturing company in a deal worth 480,000 pounds over the course of the renewal. The shares remained flat at 1.03p. * Quindell Portfolio is a corporate client of Rivington Street Holdings, the ultimate owner of UK-Analyst.  | 
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