| From UK-Analyst.com: Monday 18th March 2013
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Competition Congratulations to Nick Maltby whose caption (think about it!) was voted the funniest and has won the UK-Analyst Friday Competition. Watch out for another contest at the end of the week. 
"The two hands of God".
The Markets Stock markets across Europe tumbled on news that Cypriot savers may be forced to pay as part of an EU-backed deal to bailout the country. Policy makers from the European Union and International Monetary Fund have suggested that bank account holders on the Mediterranean island pay 10% of their bank deposits in exchange for an 8.5 billion pound bailout package. The move has caused panic in the country, with many people rushing to cash machines to withdraw their savings. In the recent bailouts of countries such as Spain and Ireland it has been the large financial institutions that have had to incur losses when these situations arise, not depositors, which makes this proposal totally unprecedented. Tobias Blattner, director of Economic Research at Daiwa Capital Markets, warned, "We had trust and faith coming back to European financial markets over the last couple of weeks and months. We had a lot of foreign investment coming in to Spain and Italy and all of this is of course in doubt again." Ahead of the Budget speech by George Osborne this Wednesday, the consensus amongst economists is that the Chancellor will stick with widespread austerity measures despite calls for the country to embark on more borrowing in an attempt to stimulate growth. A lack of economic growth and negligible progress on deficit reduction since the beginning of Osborne's chancellorship in 2010 has damaged his and the Conservative party's reputation to such an extent that a survey from Ipsos MORI revealed that the Tories now have their lowest share of voter support in a decade at 27%. Shadow Chancellor Ed Balls added his voice to the growing discern and said, "The only reason why they (the Conservative party) won't now change course is to avoid their own political humiliation." Staying in the UK, in an attempt to expand the economy the government has pledged to spend 2 billion pounds over the next 7 years to create an Institute for Aerospace Technology. The institute will work on technology which will support next-generation civil aircraft for companies such as Boeing and Airbus. The government forecasts that the investment will help to support 115,000 jobs, including those created by companies that supply aircraft manufacturers. The initiative is supported by analysts, as the civil aerospace sector is set for steady growth as a result of emerging market demand and fundamental technology changes. Deputy Prime Minister Nick Clegg announced the plan and said, "We're doing all we can to maintain this jewel in our crown, which is why government is working hand in hand with industry to inject £2bn into a unique long-term strategy to maintain Britain's position as the centre of aerospace technology." ________________________________________________________________________ ADVERTISEMENT Prizes worth over GBP3,000 up for grabs in the UK-Analyst annual user survey! CLICK HERE TO ENTER
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At the London close the Dow Jones was down by 14.79 points at 14,499.32 and the Nasdaq slipped by 0.69 points to 2,798.72.
In London the FTSE 100 was down by 31.73 points at 6,457.92; the FTSE 250 finished 15.80 points down at 14,089.75; the FTSE All-Share was down by 11.64 points to 3,410.47; and the FTSE AIM Index slipped by 5.43 points to 742.18.  Broker Notes N+1 Singer retained its "buy" recommendation on clean energy group Greenko (GKO) with a target price of 163p. The broker is encouraged by a 100 million pound investment the government of Singapore has made into a Greenko subsidiary which will help the group to achieve its target of 2GW of operational capacity by 2018. In the shorter term N+1 Singer expects the group to commission a further 51MW of wind power before the monsoon period this year which, according to the broker, should be earnings enhancing to the tune of around 19 million Euros. The shares climbed by 6.5p to 147p. Shore Capital retained its "sell" recommendation on Morrison Supermarkets (MRW) despite acknowledging that the group has delivered on its cost savings programme. Shore Capital does feel that recent trading has improved post "horse gate" and as a result of stronger marketing. However, the broker has downgraded its forecasts in the belief of a continuation of an underlying decline in like-for-like sales and in anticipation of further margin deterioration. The shares remained flat at 271.3p. Panmure Gordon maintained its "sell" recommendation on cruise ship operator Carnival Group (CCL) with a target price of 1,770p. The broker has downgraded its forecasts on the back of widespread price promotion in the US and weaker onboard revenue combined with higher costs. On these downgraded forecasts the shares trade on a 2013 P/E multiple of 18.5, a multiple which is too high according to Panmure, which also cites the poor earnings trajectory as further reason for its "sell" stance. The shares fell by 56p to 2,323p. 
Blue-Chips In a generally disappointing day for the FTSE 100 shares in Marks & Spencer (MKS) soared by 25.6p to 398.1p as rumours surfaced of a potential takeover bid. According to sources the Qatar Investment Authority is speaking to potential financiers ahead of a bid for the posh supermarket. M&S is yet to comment on the matter. Oil giant BG Group (BG.) has achieved "excellent results" in partnership with Ophir Energy from a drill stem test on its natural gas well in Block 1 of the Jodari field offshore Tanzania. According to the firm the well flowed at a maximum rate of 70 million standard cubic feet of natural gas per day. The well in question was the first in deep water offshore Tanzania and is situated 39 km off the southern coast of the country. Separately, the group confirmed that its Everest East expansion project in the UK North sea delivered its first production and is on target to produce 10,000 bopd with total gross reserves of 20.6 million barrels of oil equivalent. The shares were down by 6.5p at 1,184.5p. Pharmaceutical giant AstraZeneca (AZN) announced that it will cut around 1,600 jobs worldwide as it re-structures its research operations and consolidates its research activity to three major centres in Britain, the US and Sweden. Under the new plans the group will invest $500 million (330 million pounds) into a new purpose built facility in Cambridge in an attempt to tap into an environment of world class academic and clinical life sciences research. However, the company will cease operations at its Alderly Park facility in Cheshire which has been the focal point for the group's research and development activity for many years. The shares lost 20p to 3,049.5p.
Mid Caps Housebuilder Berkeley (BKG) announced that it is in line to deliver 568 million pounds in cash to shareholders by September 2015 as the group gets back up to speed after the restructuring of the business back in 2009. In the 4 months to the end of February the group acquired sites in Finchley, Mill Hill and Maidenhead in an attempt to grow its land bank by 10% over the financial year. Berkeley went on to confirm that the housing market in the south-east continues to be characterised by a lack of supply, which has helped it to secure forward sales of over 1.4 billion pounds. The shares gained 61p to 2,036p. India-focused energy group Essar Energy (ESSR) confirmed that Deepak Maheshwari has been appointed as group CFO, in a move which will become effective from 1st April 2013. Maheshwari has a wealth of experience in project and corporate finance and most recently served as CFO of Reliance Power Limited. Current CFO, Mr. P. Sampath, will move over to a new role as President of Business Optimization and Improvement. The shares increased by 6.3p to 153.3p. Small Caps & AIM Oil and gas waste treatment firm Nature Group (NGR) revealed that it has been contracted by North Atlantic Drilling to provide processing services for the liquid waste which is generated by its drilling rigs in Brazil. As part of the deal Nature Group will rent out its compact treatment unit for on-site waste water treatment in order to clean waste water to a standard consistent with local discharge criteria, with target water to be discharged as low as <5ppm oil in water. The shares jumped by 3p to 35.25p. Online payments facilitator Planet Payment (PPT) announced the launch of a product which enables merchants to accept UnionPay cards in the United States and Canada. The group cites the fact that there are 3.5 billion union cards in issue worldwide and that they have a strong presence in China as reasons for why its product will prove popular with vendors worldwide. The product also allows Chinese customers, for example, to pay in RMB while the merchant can receive settlement in either US or Canadian dollars. The shares slipped by 2.5p to 207.5p. Logistics outfit Pennant International (PEN) has been awarded a contract worth approximately 16 million pounds over 5 years for providing training equipment to an unnamed body. The contract represents the group's largest ever deal and has the potential to be extended for up to 20 years. The shares soared by 27p to 70.5p.
Diagnostic group EKF Diagnostics (EKF) announced a 20.3% increase in revenues to 21.6 million pounds for 2012 and generated an operating profit of 0.2 million pounds after recording a loss of 2 million pounds the previous year. EKF also revealed that gross margin was up from 48% to 55% as a result of increased sales of its liquid reagents for testing Beta-Hydroxybutyrate. EKF went on to stress that the results could have been better if it did not have to deal with the distractions posed by two separate unsuccessful approaches to acquire the company during the year. The shares fell by 2.75p to 25.5p. Media production company Talent Group (TTV) reported that gross profits fell by 43% to 292,000 pounds for the year ended 30th September 2012 despite an increase in revenues from 874,000 pounds to 1.04 million pounds. Talent Group attributed this to a drop off in levels of production. In particular, the group pointed to the delay in its "My Phone Genie" series being broadcast in Germany which, in turn, impacted the group's expectations for the timing of a potential second series. The company acknowledged that the results will not make pleasant reading for investors but insists that the next big and profitable "hit" is always just around the corner. The shares plummeted by 0.5p to 1p. Advertising group M&C Saatchi (SAA) announced an 11% growth in revenues to 169.5 million pounds for 2012 while pre-tax profits grew by 10% to 17.2 million pounds. The group acquired more "integrated" work over the period, with its CRM and mobile businesses performing strongly. Geographically, the UK division performed well, with revenues up by 11%, boosted by contract wins with Peroni, Intercontinental Hotels and Virgin Holidays. The shares declined by 13p to 204p. | 
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