Tuesday 26 February
QUOTE OF THE DAY
"If women didn't exist, all the money in the world would have no meaning. "
Aristotle Onassis
THIS MORNING IN LONDON
FTSE 100
6,268.53
-88.84 -1.37%
FTSE 250
13,494.00
-191.70 --1.40%
FTSE 350
3,367.43
-46.82 -1.37%
FTSE All Share
3,300.46
-45.37 -1.36%
AIM 100
3,301.14
-32.09 -0.96%
AIM All Share
739.98
-6.81 -0.91%
12:05 pm
THOUGHT FOR THE DAY
Hello Share Pickers,
So the big credit agency squashes the UK’s triple A rating. And the shares react by putting on value. A bit odd isn’t it.
Until you remember that the USA saw shares soar just before the weekend. And of course British shares are far more influenced by what happens in the US than they are in the home country. Which is another very odd thing about shares.
CLICK HERE for the full article
High profile M&A activity in the U.S. last week livened up a worried market beset with Eurozone slowdown fears, debt drama and a looming US budget battle. In particular, Heinz shares shot up last Thursday after Warren Buffett’s Berkshire Hathaway and 3G’s takeover of the global ketchup maker for $28billion. Peers Kellogg, Kraft Foods and General Mills shares rose in reaction to the news on that day.
So do the deluge of recent deals signal the long awaited return of M&A after three years of relatively low deal activity?
CLICK HERE for the full article
REPORT OF THE DAY
office2office - New FD Appointed
by Growth Equities & Company Research
office2office, the leading supplier of office supplies and business services in the UK, announced the appointment of Hugh Cawley as Group Finance Director on 21st February 2013.
Cawley has considerable experience in listed company leadership and restructuring, and has a skill set that will compliment o2o’s growth plans in both the short and long term.
We also note the recent share price performance and reiterate our opinion that despite shorter term financial setbacks, we see considerable strength in many areas of the business, notably within Truline and Business Critical Services.
Our stance remains buy with a 175p target price.
CLICK HERE TO DOWNLOAD THE FULL REPORT
THIS MORNING IN LONDON
FTSE 100 sinks on Italian political impasse
The Footsie lost over one per cent on Tuesday morning in the aftermath of the Italian national elections, as financial markets reacted to the political uncertainty unravelling in the Eurozone's third-largest economy.
The centre-left party led by Pier Luigi Bersani appears to have won the lower house by a narrow margin though the there was an inconclusive vote for the senate. Both Silvio Berslusconi's centre-right party and Beppe Grillo's Five-Star Movement gained a lot of support, with the latter surprising after pulling in a quarter of the vote.
With anti-austerity parties faring so well in the elections, there are fears that the government may struggle to pass through the reforms aimed at tackling its budget. With the country now seen by many as "ungovernable", a second election down the line is now looking likely.
The yield on a 10-year Italian bond on the secondary debt market soared 31 basis points to 4.77% this morning.
"Italy is at present ungovernable and that may be the case for some time so long as Italians are this divided on austerity," said market strategist Ishaq Siddqi from ETX Capital.
"The pressure this places on peripheral bond yields will also raise the spectre of bailouts for Italy but particularly Spain with markets of the opinion that if the Spanish 10-year pushes above the 6.0% mark, this would raise alarm bells and force the hand of [Prime Minister Mariano] Rajoy's government to request a bailout from the ECB."
Spanish benchmark yields were up eight basis points at 5.27% by midday.
CLICK HERE FOR THE DAY'S FASTEST MOVING STOCKS
FTSE 100: Banks, miners bear the brunt of the sell-off
Cyclical sectors such as banking were firmly out of favour this morning as the political impasse in Italy shook investor confidence. UK lenders Barclays, RBS and Lloyds were all registering steep losses with RBS weighed down by comments from Nomura ahead of its full-year results on Thursday. The broker said that the group "still faces material uncertainties with respect to deleveraging, asset quality and the future shape of operations, and remain cautiously positioned on the name."
Costa coffee and restaurant group Whitbread was also lower despite a fourth-quarter update saying that it is on track to hit full-year forecasts. The company did admit that like-for-like sales growth was "slightly surprised" by the poor weather conditions in January.
CRH, the building materials firm, edged lower after announcing that its CEO Myles Lee is to retire at the end of the year after five years running the show. The news came as the company reported lower-than-expected sales for 2012.
GKN, which reported record annual profits this morning, saw shares push into positive territory. The engineering giant posted a 19% increase in 2012 profit before tax (PBT) and a better-than-forecast 13% rise in revenue.
Chemicals group Croda was also a bright spot this morning after saying that it has made an encouraging start to the new year. The company said that PBT rose 6.6% in 2012 on sales which increased 2.3%.
FTSE 250: St Modwen drops on placing proposal
Regeneration specialist St Modwen tanked early on after proposing a placing to help fund its share in the development of the New Covent Garden Market in London. St Modwen intends to raise additional equity capital through a placing of up to 20m new ordinary shares of 10p each, representing around 9.99% of the company's existing issued share capital.
Devro, which manufactures casings products for the food industry, was also lower despite an in-line set of 2012 results, though top-line growth was held back by some cost issues/FX, according to analyst Nicola Mallard from Investec.
Chemicals company Elementis was leading the risers after reporting a 12% increase in earnings per share to 20.7p, the highest in the company's history.
CLICK HERE FOR THE DAY'S FASTEST MOVING STOCKS
WHAT THE BROKERS SAY
Nomura has reiterated its 'reduce' rating and 300p target price for UK lender Royal Bank of Scotland (RBS) ahead of the bank's full-year results later this week. Engineering group GKN will have a challenging start to 2013 but has a sound platform for solid growth, according to Jefferies which kept its 'buy' recommendation and 275p target price for the stock.
Investec has retained its 'sell' rating and 2,000p target price for Costa coffee, restaurant and hotel owner Whitbread on the back of a like-for-like (LFL) sales miss in the fourth quarter and an unattractive valuation.
Andor Technology: Investec shifts target price from 460p to 500p and keeps a buy recommendation.
Click here for the rest of the broker recommendations
THE LATEST ON THE CRAZY BOARD
The top 5 hot company threads on the Bulletin Board:
DECHRA PHARM(DPH)-Veterinary/Animal Healthcare.
Clean Air Power CAP
St. Modwen Properties
EROS INT (EROS)- Bollywood for your Portfolio?
WILMINGTON GROUP (WIL)
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Regards,
ShareCrazy
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