From UK-Analyst.com: Friday 1st February 2013
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The Markets The manufacturing sector in Britain grew modestly in January, offering a glimmer of hope to an economy possibly about to enter a triple-dip recession. The Markit/CIPS Manufacturing Purchasing Managers' Index (PMI) stood at 50.8 for the month, which indicates a slower rate of growth when compared to December's PMI of 51.2. However, the data must be viewed in context as manufacturing only accounts for 10% of the economy. Rob Dobson, the Markit economist who conducted the survey said, "The survey will do little to assuage fears of a triple-dip recession unless accompanied by an improvement in the services sector". The picture was more bleak in the Eurozone in January with manufacturing figures showing a contraction, albeit at a slower rate. The PMI rose to 47.9 in January, up from 46.1 in December, in a continuation of a contraction which has lasted since August. However, the popular consensus amongst analysts is that the Eurozone is improving. Markit's Chief Economist Chris Williamson said, "Providing there are no further setbacks to the region's debt crisis, this data adds to the expectation that the euro zone is on course to return to growth by mid-2013". Staying in the Eurozone, inflation fell by more than expected in January as companies kept prices relatively stable in order to entice a public weak in confidence. Eurostat's first inflation estimate of 2% was lower than the 2.2% forecast by many analysts and could give the European Central Bank scope to cut interest rates in an attempt to stimulate the economy. However, there is still a considerable discrepancy in results between the wealthier Northern countries and the debt ridden southern European countries. Evelyn Hermann, an economist at BNP Paribas said, "The story in the euro zone remains one of national divergence between the peripheries and the core".
At the London close the Dow Jones was up by 127.91 points at 13,988.49 and the Nasdaq gained 19.49 points to 2,751.02. In London the FTSE 100 increased by 67.66 points to 6,344.54; the FTSE 250 finished 233.39 points up at 13,263.88; the FTSE All-Share gained 38.21 points to 3,325.59; and the FTSE AIM Index crept up by 7.78 points to 740.92.  Broker Notes Panmure Gordon reiterated its "buy" recommendation on 888 Holdings (888) with a target price of 143p. The broker noted the group's confidence in meeting full year market expectations as evidenced in December's trading statement. Furthermore, Panmure forecasts 3% profit growth in 2013 and already believes that this could be slightly on the conservative side given the current momentum in the business. Additionally, the broker pointed to the EV/EBITDA of 7.8 times which is at no premium to the gaming sector average. The shares climbed by 8.25p to 122.75p. W.H. Ireland retained its "buy" stance on electronic component manufacturer Solid State(SSP) with December's positive interim results still in mind. The broker is impressed with how the group is diversifying away from its component distribution beginnings and believes its fortunes will diverge away from companies such as Premier Farnell and Electrocomponents whose revenues are currently declining. W.H. Ireland believes now is even more of an attractive entry point because of the relatively low P/E multiple of 10.1x. The shares remained flat at 212.5p. Canaccord Genuity maintained its "buy" recommendation on oil giants Royal Dutch Shell(RDSB), with a target price of 2,650p. The broker does acknowledge that Shell's Q4 underlying earnings were disappointing at $5.6 billion (3.56 billion pounds) but believes this disappointment was offset by the guidance of a dividend increase of 5% and 2012-15 volume targets which underline the strength of prospective free cash flow. Furthermore, according to Cannacord's valuation Shell shares have 27% upside in comparison to the sector average of 24%, a fact which the broker uses to further justify its "buy" recommendation. The shares increased by 10p to 2,304p. CLAIM A FREE PAIR OF TICKETS TO MASTER INVESTOR 2013 - CLICK HERE AND ENTER THE PROMO CODE UKA2013 Blue-Chips Sugar suppliers Tate & Lyle (TATE) revealed that pre-tax profits for the final 3 months of 2012 will be in line with expectations despite being slightly down on last year as a result of volatile corn prices. The company also cited "business transformation initiatives" including the development of the commercial and food innovation centre in Chicago for the year-on-year dip. Additionally, Tate & Lyle expects to generate modest growth this year but did warn that higher corn costs across Europe could squeeze margins on its sweeteners. The shares slipped 8.5p to 804p. Telecoms giant BT Group (BT.A) posted a 7.5 hike in profits to 675 million pounds despite a 6% dip in revenues to 4.51 billion pounds for the 3 months ended 31st December 2012. The success stems largely from the increasing take-up of BT's fibre broadband service, which is now being used by 1.25 million homes around the UK with 281,000 homes joining across the quarter. Another highlight of the period was the 1.9 billion pounds in new orders secured by the Global services division. The shares climbed by 16.2p to 264.8p.
Mid Caps Electronics distributor Electrocomponents (ECM) announced a 1% increase in total sales for the 3 months ended 31st January 2013, as a slight dip in electronics sales was more than offset by an increase in maintenance sales. Furthermore, the group's recent investment in search engine marketing and web check-out systems seems to have reaped rewards as online sales increased by 5% and now account for 57% of all sales. This news comes after broker Shore Capital reiterated its "sell" stance on the company last week. The shares were up by 11.2p at 258.4p. Engineering support services group QinetiQ (QQ.) revealed that, after reviewing its current 25 year contract with the Ministry of Defence (MOD), the MOD will now pay 998 million pounds for the continuation of services over the next five years. Under the terms of the long term partnering agreement QinetiQ will provide test and evaluation services as well as training services up until March 2018. The shares jumped by 9.6p to 197.6p. Top technical analyst Zak Mir of Zaks-TA.com today made QinetiQ his chart of the week. For a free trial to Zak's service CLICK HERE. Banknote printer De La Rue (DLAR) announced that trading in the last four months has been in line with expectations, with the company expected to produce 6.4 billion banknotes and around 9,000 tonnes of banknote paper for the 2012/13 financial year as a whole. The group did warn that the banknote paper market continues to be challenging in a reflection of increased competition and subsequent pricing pressure. However, the group maintain its confidence in generating an operating profit in excess of 100 million pounds for the 2013/14 financial year under its current improvement plan. The shares increased by 51.5p to 953.5p. 
Small Caps & AIM China Food Company (CFC), the producer of cooking and dipping sauces, revealed that construction of the company's new animal feed factory has been completed, raising production capacity of compound feed from 60,000 tonnes to 240,000 tonnes in a measure which has the potential to increase annual revenue from 24 million pounds to 100 million pounds. Separately, the firm announced that it achieved sales of 20 million pounds in the six months to December, up by 18% on the previous year in an increase attributed to the continued popularity of the group's flagship Xaka soya sauce product. The shares lost 0.5p to 17p. Beacon Hill Resources (BHR) confirmed it has finalised an agreement with Thelo Rolling Stock Leasing Proprietary Limited for the provision of rolling stock on the Sena railway line in Mozambique to help with shipments of coal. Beacon Hill is currently trucking coal from its mine on the African Island to the port and will continue to do this until the agreement becomes effective later in the year. The shares soared by 1.24p to 4.01p. Electronic components manufacturer Elektron Technology (EKT) issued a profits warning because of an underperforming portfolio of products. The firm hinted that it may shift its current emphasis away from its Chinese operations as it does not consider it to be "a low cost location" any more. However, the group was quick to stress that it is confident in its long-term future as it continues to invest in a new management team. The shares dropped by 2.75p to 14.5p. 
Business communications specialists Daisy Group (DAY) confirmed that it has acquired The Net Crowd Limited for an undisclosed amount. Net Crowd is an IT specialist which provides installations and maintenance in the UK and has partnerships with clients such as Cisco, Jupiner Networks, HP and Microsoft. After completion of the transaction NetCrowd's management team will continue to run the business. Daisy Group believe that the acquisition will enhance its presence in the IP and data markets resulting in increased selling opportunities within the enlarged base. The shares inched up by 0.5p to 99.5p. Animal food additives seller Anpario (ANP) revealed that it expects to reveal EBITDA levels in line with market expectations for 2012, boosted by a good performance by the acquired Meridan Animal Health. According to the group, trading since the turn of the year has started well as it continues to target organic growth and make strategic investments to further its reach in key markets. The shares were up by 7.6p at 135.1p. Security software provider Intercede (IGP) admitted the deferral of significant anticipated new orders which will now be recorded in the group's next financial period. These delays in orders have come principally as a consequence of U.S Government's compromise agreement with congress on the "fiscal cliff" which has delayed any decision on spending cuts until at least February 2013. As a result, Intercede's revenues are likely to remain at a similar level to last year. The shares fell by 12.5p to 62p.
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