| From UK-Analyst.com: Monday 29th April 2013
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The Markets According to the European Commission, confidence in the Eurozone economy fell further in April, in a period characterised by the uncertainty in both Italy and Cyprus. The Commission's latest survey for the 17-country bloc edged 1.5 percentage points lower to 88.6 - worse than the average analyst estimate of a fall to 89.3. Germany, the Eurozone's largest economy, saw one of the sharpest declines in the region, with its economic confidence index falling by 2.3 points, while confidence in Italy fell by 1.9 points. The findings are likely to pile even more pressure on the European Central Bank to cut interest rates as a means of kick-starting the sluggish economies around the continent. Steen Jakobsen, Chief Economist at Saxo Bank, commented, "We are reaching a trough and the market is betting on the ECB cutting rates to lift the economy. But lower interests won't solve the euro zone's problems, we need structural reforms and for businesses to invest again." Across the pond, US consumer spending rose by 0.2% in March in an increase which was steeper than expected. The services sector drove the increase as an unseasonably cold month forced Americans to pay more to heat up their homes. However, the headline figures masked the fact that sales at retail stores and restaurants fell over the period by the largest increment in nine months. Millian Mulraine, an economist for TD Securities, warned, "It's a relatively decent showing for spending, but consumers won't be able to sustain the current pace if income growth continues to disappoint." Here in the UK, MPs have criticised the government's 310 billion pound infrastructure programme, urging ministers to be realistic on how much investment can be made against the backdrop of the uninspiring economic climate. The Public Accounts Committee accused the plan of being unclear, with individual projects having no clear priority over others. The committee also said that the bill would ultimately be shouldered by the public as large corporations which provide investment pass on the cost to customers. In a statement the committee said, "We are not convinced that a plan requiring 310 billion pounds of investment in infrastructure is credible given the current economic climate, the cutbacks in public finances and the difficulty in raising private finance for projects on acceptable terms." ADVERTISEMENT
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At the London close the Dow Jones was up by 69.26 points at 14,781.81 and the Nasdaq fell by 26.08 points to 2,866.63. In London the FTSE 100 was up by 31.60 points at 6,458.02; the FTSE 250 finished 17.82 points higher at 13,992.80; the FTSE All-Share grew by 14.80 points to 3,403.54; and the FTSE AIM Index inched up by 0.87 points to 707.09.  Broker Notes Canaccord Genuity retained its "sell" recommendation on logistics and pest killing group Rentokil (RTO) with a 80p target price. The broker acknowledges that the disposal of its CityLink delivery business for a nominal 1 pound will be earnings enhancing for the group in the current year. However, the broker feels that the quality of the core business post disposal will be worse and will struggle in terms of pricing power. Canaccord also feels the worst is yet to come with regards to trading conditions in Europe and has lowered its profits forecast accordingly. The shares slid by 0.65p to 96p. Panmure Gordon retained its "buy" recommendation for online retail group Asos (ASC) with a 4,000p target price. The broker notes that both revenue and gross margin comparables will soften significantly for ASOS in H2 and feels this will provide further positive momentum for the shares this year. Furthermore, Panmure admits that the unexpected resignation of International Director, Jon Kamaluddin, is an inconvenience but is encouraged by the fact that he will stay to oversee the launch of the group's new websites in China and Russia. The shares climbed by 88p to 3,076p. Cantor Fitzgerald maintained its "buy" stance on dairy product distributor Ukrproduct Group (UKR) with a target price of 20p. The broker was impressed with today's results which revealed that net profits had doubled over FY12, vindicating the Ukranian group's recent cost-cutting initiatives. Cantor feels that these results were even more impressive given the fact that Ukrproduct delivered them against the backdrop of an export ban to Russia which caused structural divisions to the market and feels that performance will improve even further as trading conditions become more favourable. The shares slipped by 0.75p to 12.5p.
Blue-Chips Lloyds Banking Group (LLOY) announced that it is to sell its Spanish retail banking operations to Banco Sabadell for a 1.8% stake in the Spanish bank, worth around 72 million pounds. In addition, Lloyds will receive a further 17 million pounds in cash within the next five years dependant on mortgage book margins. The banking group said that the transaction was in line with its strategy of "rationalising its international presence" as it looks to streamline and focus on areas with higher levels of profitability. The shares grew by 0.55p to 53.46p. Fund manager Aberdeen Asset Management (ADN) revealed that revenues grew by 25% to 516 million pounds over the six months ended 31st March, while pre-tax profits soared by 37% to 222.8 million pounds. The group attributed this improvement in performance to strong demand for its higher-margin investment funds as well as a pickup in activity within its emerging markets where the group's equity funds benefitted from particularly strong inflows. The shares were up by 31.2p to 448.3p. Mining giant BHP Billiton (BLT) has agreed to sell its Pinto Valley copper mining operation in Arizona and the associated San Manuel Arizona Railroad Company to Capstone Mining Corp for $650 million (419 million pounds). The transaction - due to be completed in the second half of 2013 - is conditional on regulatory approval. The general consensus on BHP Billiton amongst brokers of late has been positive, with both Deutsche Bank and UBS retaining their "buy" recommendations on the shares earlier this month. The shares jumped by 16.5p to 1,832p.
Mid Caps Baker Greggs (GRG) warned that profits for the current financial year are likely to be lower than market expectations due to the combination of adverse weather over the first four months and the difficult underlying market conditions. Like-for-like sales during the period fell by 4.4% after adverse weather in January and March kept customers away. Although total sales were up by 3% as 10 shops were opened over the period, the group conceded that it continues to experience lower footfall across its stores and blamed the continued squeeze on the public's disposable income as a driver for this trend. The shares fell by 39.3p to 423.2p. Construction firm Balfour Beatty (BBY) also warned on profits, declaring that its UK construction business is likely to generate lower profits than which management projected last month. The group blamed a "challenging" UK construction market in which sub-contractors were plagued by severe financial constraints The deterioration in conditions has prompted the group to implement an organisational restructuring in order to streamline the business for future success while reducing costs to remain competitive in the short-medium term. The shares were down by 23.5p at 222.9p. UK pub owner Greene King (GNK) announced that it expects to meet full year expectations as retail like-for-like sales rose by 2.2% and food sales climbed 2.7% over the 51 weeks ended 28th April. The group went on to stress that it had a particularly strong Easter where it sold a record 700,000 meals over the four-day period and delivered LFL growth of 5.2%. The update was enough to prompt broker Liberum Capital to re-iterate its "buy" recommendation on the group, with a 709p target price. The shares swelled by 8p to 722.5p.  Small Caps Engineering firm Corac Group (CRA) revealed that its subsidiary Corac Energy Technologies will start a feasibility study in the North Sea on behalf of Tullow Oil. The project in question will focus on wellhead compression on a gas production platform in the Southern North Sea. The financial details of the agreement were not disclosed. The shares ended the day 1.375p higher at 13.25p. Software providers to the recruitment industry World Careers Network (WOR) reported a slight dip in pre-tax profits from 1.08 million pounds to 1.07 million pounds for the six months ended 31st January 2013, despite a 10% increase in revenues to 3.86 million pounds. The group attributed its declining profitability to increased marketing spend, combined with a higher average headcount. The group went on to concede that it is unlikely to match last year's record results due its increased dependence on large scale contracts which, in turn, is likely to make its revenues, growth and profit more erratic in nature. The shares dived by 17.5p to 182.5p. Restaurant operator Richoux (RIC) announced that it generated pre-tax profits of 0.88 million pounds for the 53 weeks ended 30th December 2012, in a swing a from a 2.7 million pounds loss the previous year. The group stressed that it is focused on building on these promising results over the course of this year and has confirmed that it is planning new openings across its Villagio, Dean's Diner and Zippers brands. The sharers were up by 2.5p to 14p. 
Oil exploration software firm Vialogy (VIY) revealed that it has signed a business and technical collaboration agreement with CGG, the geoscience group. The deal is intended to give Vialogy access to global sales and services locations as well as direct access to CGG customers. In exchange, CGG will receive reimbursement for services, and will be able to monitor and exploit Vialogy's QuantumRD technology for its own business and technical purposes. The shares grew by 0.18p to 1.43p. Orusur Mining (OMI) announced that it is to review its operations at its San Gregorio mine in Uruguay after the recent steep fall in the gold price. The group also revealed that it expects group production for the year to be at the lower end of its target range of between 63-68,000 ounces of gold. As a result of the uncertainty, the group confirmed that it is initiating cost cutting measures which are expected to include a significant reduction in the company's workforce. The shares plummeted by 10p to 21p. Fuel cell power company AFC Energy (AFC) has been able to extend the lifespan of its electrodes to more than nine months of continuous operation. The development pushes the technology a further step towards becoming commercially viable. The groupÂÂ's fuel cells help to create electricity from the by-product of the chlorine manufacturing process, although there are a number of different uses for the platform. The group remains adamant that it is now "within touching distance" of reaching its target of producing electrodes with a 12-month life span. The shares crept upwards by 2.75p to 29p. | 
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