From UK-Analyst.com: Monday 4th February 2013
Competition Congratulations to Richard Tyszka, whose caption (below) has been voted the funniest and has won the Friday competition. Watch out for another contest at the end of the week. 
"I really don’' think that this is a viable alternative to upgrading the railways Sebastian..."
The Markets Banks in Britain which expose themselves to "risky investment activities" will face being dismantled according to Chancellor George Osborne. Under new rules the Bank of England will monitor other banks, ensuring that risks taken by their investment banking arms do not endanger any retail customers. George Osborne said in his speech, "If a bank flouts the rules, the regulator and the Treasury will have the power to break it up altogether - full separation, not just a ring fence". British construction output declined once more in January as the fall in output continued at its fastest rate since last June. The Markit/CIPS Construction Purchasing Managers' Index (PMI) held at 48.7, a figure which fell short of popular economists' forecasts for a rise to 49.1. Although heavy snow depressed activity last month, weak demand and a distinct lack of new prospects underpinned the continued contraction. Tim Moore, Senior Economist at Markit commented, "Unfavourable weather outside is clearly far down the long list of difficulties afflicting construction companies at present", The aftermath of Spain's property bubble burst continues to burden the country as provisions against bad loans dented profits of the largest lenders including BBVA and Caixabank in the last quarter of 2012. In 2012 Spanish banks were forced by the government to set provisions against loans made to real estate developers. Analysts currently believe that Spanish banks will endure further pain this year as the economy is expected to contract sharply in 2013, with unemployment still above the 25% mark. Ashok Shah, Chief Investment Officer at London & Capital said, "The underlying real estate market is only half-corrected, so when it fully corrects over the next year of two, the non-performing loans are going to keep spiking up". 
At the London close the Dow Jones was down by 116.34 points at 13,893.45 and the Nasdaq fell by 32.32 points to 2,731.64. In London the FTSE 100 decreased by by 100.40 points to 6,246.84; the FTSE 250 finished 98.74 points up at 13,177.44; the FTSE All-Share lost 48.31 points to 3278.93; and the FTSE AIM Index slipped by 2.85 points to 737.93.  Broker Notes Seymour Pierce upgraded its "hold" recommendation to a "buy" on Victoria Carpets (VCP) with a 50p increase in target price to 250p. The broker is impressed with the current cost-cutting programme which management has embarked on in response to a weaker trading environment. Seymour Pierce also noted that Geoff Wilding, the Chairman, will be paid a salary completely linked to the performance of the shares. The shares were up by 3.5p at 206p. Seymour Pierce also downgraded its "hold" stance to a "sell" on New Britain Palm Oil (NBPO) on the back of fears over levels of production in the short-term. The broker noted that rain during January at the group's main production site of West New Britain Province in Papua New Guinea was 57% higher than the previous year, fuelling fears of crop losses and longer harvesting intervals. Additionally, the broker is cautious over continued subdued palm oil price levels and therefore expects PBT levels for the current financial year to be significantly under market expectations. The shares fell by 35p to 520p. Daniel Stewart retained its "buy" recommendation on online gaming firm 888 Holdings (888) with an increased target price of 140p. The broker is encouraged with the group's final quarter revenue of $97 million (61.7 million pounds), representing a year-on-year increase of 7%; an increase boosted by a 31% hike in poker-sourced revenues. Daniel Stewart goes on to say that the positive momentum within the group could result in it outperforming market expectations in 2013. The shares lost 7.5p to 115.25p. 
Blue-Chips Mining group Anglo American (AAL) revealed that its platinum business, Anglo American Platinum, made a loss of 225 million dollars (143 million pounds) in 2012. The world's largest platinum producer attributed this to a drop in production of 305,600 ounces of platinum due to miners' strikes, especially the eight week stint of strikes at its platinum mine in Rustenberg, South Africa. This news comes after the group revealed in January it would cut 14,000 jobs. Investment bank Goldman Sachs encapsulated the sentiment surrounding the shares last week by reiterating its "sell" stance with a target price of 1,500p. The shares were down by 29.5p at 1,924.5p. Profit was up by 16% to $511 million (325 million pounds) at gold miner Randgold Resources (RRS) in 2012 as production grew by 14% to 794,844 ounces of gold across all of its projects. The success was underpinned by results at its Loulo-Gounkoto site in Mali, which delivered 503,224 ounces of gold, a figure well in excess of the target stipulated at the start of the year. Randgold is now focusing on getting back up to speed with production at its Tongon Mine in Mali after a fire disrupted production at the end of December. The shares increased by 190p to 6,275p.
Mid Caps Oil exploration group Salamander Energy (SMDR) revealed that it has discovered oil at the first well in its multi-well programme in North Kutei. The South Kecapi-1 exploration well encountered 40 metres of net oil and gas pay in high quality sandstones. Furthermore, the group reported that after a drill stem test within the well, light oil is now flowing at a rate of 6,000 bopd. Deutsche Bank seems to have pre-empted a potential discovery as it reiterated its "buy" recommendation on the shares back in mid-January. The shares jumped by 22p to 208p. Hikma Pharmaceuticals (HIKMA) has signed a licensing and distribution agreement with EffRx pharmaceuticals for Bonisto, a osteoporosis medication, for distribution to the Middle East and North Africa region. Under the terms of the agreement, Hikma will have the rights to register, market and distribute the medication in 19 countries across the region. The agreement should enhance Hikma's presence in the region giving further weight to the 1,600 sales and marketing representatives across the region. The shares inched up by 5p to 829p. 
Small Caps & AIM Interior furnishings group Walker Greenbank (WGB) expects total sales for the year ended 31st January 2013 to be up by 2.3% on the previous year at 75.7 million pounds. This is a reflection of strong growth in international markets, with trading in the U.S being particularly strong. The group, which designs and manufactures fabrics, wallpapers and furnishings, added that pre-tax profits for the year should be above expectations as a result of robust trading since it announced its half year results in October. The shares climbed by 5.6p to 86.19p. Digital TV services provider Mirada* (MIRA) announced it has secured the deployment of its Navi content navigation tool to a new pay TV service. Mirada confirmed that AXTEL, a large telecommunications provider in Mexico had launched an interactive TV product which it would be using Mirada's Navi product under its partnership with Ericsson. As a consequence, Mirada will receive set up fees as well as licence fees dependent on the number of subscribers. The shares were up by 0.95p at 12.2p. Renewable Energy (WIND) announced a 3% increase in revenues to 6.5 million pounds for the 6 months ended 31st December 2012 but EBITDA down from 1.6 million pounds to 1.4 million pounds. Separately, the energy firm highlighted that it has received planning permission from Cornwall Council for the 10MW St. Breock Repower project and that it has a further 80MW of wind projects awaiting approval in the UK planning system. The shares slipped by 0.25p to 65.5p. Outsourcing group Digital Globe Services (DGS) informed the market of its intention to float on AIM in mid-February. The firm was founded in 2008 in Colorado and employs around 430 people throughout the world. DGS has been profitable every quarter since 2009 and is looking to sell up to $15-20 million worth of shares on admission. 
Back office software supplier EG Solutions (EGS) issued a profits warning for the year ended 31st January 2013, with revenues expected to be significantly below market expectations at 4.81 million pounds. The underperformance for the year was due to a delay in various projects being taken past the pilot stage. However, the group is adamant that these revenues will now fall into the current year ended 31st January 2014. The shares plummeted by 17.5p to 90p. According to Tangiers Petroleum (TPET), its recent 3D seismic program has highlighted "significant upside" at the Tarfays offshore block in Morocco. Data from the programme confirms the Trident prospect and secondary objectives at the site potentially contain an estimated 750 million barrels of recoverable oil, with a geological chance of success of 23%. Under terms set out in a farm-out agreement back in December, Tangiers has a 25% interest in the block. The shares were down by 1.24p at 21.275p. African agricultural group Zambeef (ZAM) has agreed to sell 49% of its stake in Zamchick, its chicken broiler business, to Rainbow Chicken Limited for a cash consideration of $14.5 million (9.2 million pounds). Rainbow Chicken is currently South Africa's largest chicken producer and should help the Zamchick business scale-up the mass production of processed chicken products. Under the agreement, Zambeef will continue with the daily management of the business as it uses Rainbow's technical expertise in the chicken broiler business. The shares gained 2.375p to 53.125p. 
Rainbow chicken? * Mirada is a corporate client of Rivington Street Holdings, the ultimate owner of UK-Analyst. | 
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