From UK-Analyst.com: Tuesday 5th February 2013
The Markets The Eurozone's troubled economy is showing signs of recovery but there is a strong contrast in fortunes between two of its major forces, France and Germany. Markit's Eurozone PMI, a general measure of business activity, rose from 47.2 to a 10 month high of 48.6 in January. Although the reading still indicates contraction, the signs are promising as the measure has now risen for the third consecutive month. However, while the reading from Germany saw its biggest monthly increase since 2009, France's reading hit a 4-year low in a difference which will worry European leaders. Jennifer McKeown, Economist at Capital Economics commented, "That's a really worrying sign. It's going to cause more tensions between Germany and France...on various aspects of euro zone management." Meanwhile, the UK service sector surprisingly returned to growth in January, reducing the chance of a triple-dip recession. The PMI for services grew to 51.5 from 48.9 in December, a month in which the sector shrank for the first time in two years. The median analyst PMI forecast was 49.5 so the actual reading came as a positive surprise. Investec economist Victoria Clarke said, "It does suggest the UK economy has started growing again in January, which is certainly good news for all those fearing a triple-dip recession" Barclays was the first of the major UK banks to report on how it will respond to the recent interest-rate hedging products scandal as it announced it has set aside a total of 850 million pounds to deal with the issue. The scandal relates to unnecessary swaps which were offered to thousands of small firms which enquired about bank loans. Borrowers were told that these products would provide a hedge against the risk of interest rates rising. However, interest rates fell from 2008 to record lows and left customers with thousands of pounds of losses in the process. Barclays has also provided a further 600 million pounds for Payment Protection Insurance redress as a result of a higher than anticipated response rate to pro-active mailings in Q4. This brings the bank's cumulative provision to 2.6 billion pounds. 
At the London close the Dow Jones was up by 113.66 points at 13,993.74 and the Nasdaq grew by 28.03 points to 2,743.71. In London the FTSE 100 increased by 34.26 points to 6,281; the FTSE 250 finished 68.63 points up at 13,245.65; the FTSE All-Share gained 17.48 points to 3296.41; and the FTSE AIM Index crept up by 2.76 points to 740.69.  Broker Notes Daniel Stewart reiterated its "buy" stance on Stellar Diamonds (STEL) with a target price of 27p. The broker is encouraged with the firm's recent placing of 1.1 million pounds and believes this will more than facilitate the mining group's studies at sites in Sierra Leonne and Guinea. Daniel Stewart believes these studies will significantly de-risk both projects and that, if they yield positive results, the upside could be huge. The shares remained flat at 2.5p. Canaccord Genuity retained its "sell" stance on credit rating group Experian (EXPN) with a target price of 898p. Canaccord is cautious over the year-on-year deceleration in organic growth from 10% to 7% in the third quarter of the current financial year and believes this will continue consistently with the slowdown in the Brazilian economy; an economy which generated 50% of organic growth in 2012. The shares crept up by 4p to 1,096p. Shore Capital maintained its "buy" recommendation on pharmaceutical giant GlaxoSmithKline (GSK) despite a relatively poor year in 2012 in terms of financial performance. However, the broker is encouraged over developments from its pipeline, especially on the respiratory front, with possible product approvals scheduled for later in the year. Additionally, broker Shore Capital noted that the group plans to review its European business and is considering re-structuring measures to make the business more efficient in times of widespread austerity across the continent. The shares inched upwards by 1p to 1,442p. CLAIM A FREE TICKET TO MASTER INVESTOR 2013 - CLICK HERE AND ENTER THE PROMO CODE UKA2013 Blue-Chips Microchip designer ARM Holdings (ARM) posted a 16% increase in pre-tax profits to 80 million pounds on a 21% hike in revenues to 262.8 million pounds. The main driver for these increases was soaring sales levels of smartphones and tablets worldwide as the products virtually all contain Arm's chips. The hike in profits was significantly above market expectations, with many analysts expecting the group to record a pre-tax profit of just 75.6 million pounds. The shares climbed by 39p to 931p. Oil giant BP (BP.) revealed profits of 4 billion dollars (2.54 billion pounds) for the fourth quarter of 2012, down from 5 billion dollars (3.17 billion pounds) in the previous year. Although this represented a 20% decline in profitability, the result was still above analysts' expectations because of the divestments the group made in 2012. Separately, BP could be subject to further charges in relation to the oil spill in the Gulf of Mexico in 2010, with a trial due to begin late next month. The shares were up by 6.65p at 468.7p. Energy group BG Group (BG.) confirmed that it would not hit its 2015 production target of more than 1 boepd partly because of an agreement to sell a stake in an Australian liquefied natural gas project to Chinese firm CNOOC. In 2012, full year production rose by 3% despite a 29% decline in 4th quarter earnings to 1 billion dollars; a decline primarily the result of a one-off tax credit in late 2011. The shares increased by 38p to 1,142p.
Mid Caps Talk Talk Telecom (TALK) reported a 1.6% fall in total revenue for its third quarter to 415 million pounds due to the continued squeeze in off-net revenues. This drop off in revenues came despite the group's first quarterly increase in customers in three years as the group oversaw a net increase of 80,000 TV subscribers, 35,000 mobile customers and 10,000 broadband customers. On the back of this news broker Jefferies reiterated its "buy" stance on the shares with a target price of 270p. The shares fell by 11.4p to 242p. Property regeneration specialist St. Mowden Properties (SMP) announced a pre-tax profit of 52.8 million pounds for 2012, up 2.1% on the previous year. The company partly attributed this increase to a higher presence in the London and South East market. Additionally, the first half of 2013 will see the group embark on the first phase of its largely anticipated 150 million pounds development project at Swansea University and its New Covent Garden Market development in central London. The shares remained flat at 248.5p. Media and marketing services company UBM (UBM) intends to sell its data services businesses to Electra Partners LLP following an offer of 160 million pounds. The businesses being sold represent the bulk of UBM's data services including its health, technology & IP, trade & transport and paper business units. The businesses in question generated approximately 179 million pounds in revenues in 2012, a relatively low amount, as advertisers cut back on higher margin print advertisements amid the widespread shift towards digital advertising. The shares fell by 43.5p to 740.5p. 
Small Caps & AIM Oil and Gas support services firm Corac Group (CRA) revealed that it expects its financial performance for 2012 to be ahead of market expectations, boosted by the positive impact of its two recently acquired businesses. In the positive update the group went on to say that it is excited about 2013 and cites its growing order book for reason to believe in the commercialisation potential of its technology. The shares jumped by 1.25p to 14.75p. Medical company Plethora Solutions (PLE) revealed that it is currently in talks with third parties in order to secure funds for working capital purposes. Plethora requires the money to take its current PSD502 premature ejaculation drug to market. Furthermore, the group is currently undertaking a strategic review of its commitment to its marketing subsidiary, the Urology company. The primary aim of this subsidiary is to work with partner companies internationally in providing healthcare professionals and patients in the UK with products to treat urological disorders. The shares plummeted by 2.875p to 2.125p. Software provider Allocate Software (ALL) posted broadly flat revenues at 16.1 million pounds for the 6 months ended 30th November while narrowing its loss before tax from 6.6 million pounds to 2.5 million pounds. The group was keen to stress that it is now in more of a financially stable position as recurring revenue now accounts for 51% of total revenues and has increased 11% to 8.2 million pounds. The shares remained flat at 0.8p. 
Mineral exploration group Mariana Resources (MARL) revealed a board room shake-up which sees CEO, John Horsborough, step to the Chairman's role. CFO, Glen Parsons, has subsequently been promoted to CEO. Under this new leadership the firm now intends to focus on its Condor De Oro project in Peru, in a shift away from its Argentinean assets due to negative investor sentiment regarding the sites. Separately, Mariana confirmed that it plans to de-list its shares from the Toronto Stock Exchange citing low levels of trading activity. The shares lost 0.625p to 3.875p. Travel and resort development company Minoan Group (MIN) expects is Travel operations to report revenues of 37 million pounds and operating profits of approximately 400,000 pounds for the year ended 31st October 2012. As a result of a "robust" performance from the division the group also expects to report a much smaller loss than the 1.6 million pounds loss it reported last year. The firm, which bought King World Travel, John Semple Travel and the Ski Travel Centre over the period, went on to say that current trading is promising and that it should report much higher figures for 2013 compared to 2012. The shares were up by 0.125p at 7.5p. Sable Mining Africa (SBLM) revealed a maiden resource for its Nimba project in Guinea which has now been classified as a JORC resource of 121.5 Mt at an in-situ grade of 57.8% Iron using a 40% cut-off. Significantly, there is even further reason for upside as the resource estimate only covers 2 of the 3 prospects within the 11sq km site. Broker Matrix Capital is impressed with the recent estimates and believes the group is well positioned to complete the transition from explorer to producer and has given the shares a "buy" recommendation with a target price of 38p. The shares crept up by 0.125p to 11.625p. | 
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