| From UK-Analyst.com: Thursday 18th April 2013
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The Markets Japan generated a record high deficit of 54.5 billion pounds for the first three months of 2013 in a reflection of weak global demand, coupled with elevated fuel import costs. However, it is not all doom and gloom amongst analysts, with many predicting this to be the turning point for the world's third largest economy as the weak yen begins to drive the nation's exports upwards. Masahiko Hashimoto, Economist at Daiwa Institute of Research, commented, "Energy imports stay high and the yen was weakening against this background, resulting in trade deficits. We are now seeing the negative side although the overall impact will be positive [longer-term]." According to numbers from the Office for National Statistics (ONS), UK retail sales were down by 0.7% month-on-month in March. The figures will not come as a surprise to economists who expected a slip in volumes following strong growth in February, as shoppers caught up on lost time caused by the snowy disruption which plagued the UK in January. The figures also revealed that non-food sales were down by 0.4% in March, the biggest monthly drop since 2010. Alan Clarke at Scotiabank said, "It's obviously disappointing that it's down just under a percentage point on the month, but given that it jumped by 2% the previous month, it was always going to give back some of that prior strength." The major European stock indices were broadly highly after a European Central Bank council member alluded to the possibility of a cut in Eurozone interest rates. The markets were also boosted as Germany's parliament finalised an international bailout package for debt-stricken Eurozone member Cyprus by a large majority. The pick-up was especially well received as European equities were down sharply yesterday after Bundesbank head and ECB council member Jens Weidmann declared that the Eurozone's sovereign debt crisis could take over 10 years to reverse. Gekko Markets' analyst Anita Paluch commented, "The market reaction was more pronounced than usual due to the fact that while other ECB board members have gone on record as suggesting rates might need to be lower, at no time has Mr Weidmann ever suggested he might also lean in that direction."
At the London close the Dow Jones was down by 46.88 points at 14,571.71 and the Nasdaq lost 24.06 points to 2,757.92. In London the FTSE 100 was up by 0.54 points at 6,243.67; the FTSE 250 finished 21.87 points up at 13,553.04; the FTSE All-Share edged up by 0.34 points to 3,292.53; and the FTSE AIM Index slipped by 2.57 points to 702.90.  Broker Notes Panmure Gordon upgraded its "hold" recommendation to a "buy" on equipment hire firm Lavendon Group (LVD) with a 199p target price. The broker feels that the group's efficiency gain plans are on track and expects ongoing improvements as the current year progresses. Panmure is also excited by strong growth in activity in the Middle East and is adamant that Lavendon has adequate firepower to invest in additional kit to capitalise further on this region of growth. The shares slipped by 2.25p to 163.5p. Shore Capital retained its "buy" recommendation on Jupiter Fund Management (JUP) after a "strong" Q1 IMS released today. The broker was particularly encouraged by the 11% growth in assets under management to 29.1 billion pounds which was boosted by positive market movements of 2.66 billion pounds. Furthermore, Shore Capital again stressed its belief that Jupiter will be debt free by the end of FY 2013 and used this for further justifIcation for its "buy" stance. The shares were down by 8.9p at 318.6p. N+1 Singer re-iterated its "buy" recommendation on Industrial equipment provider Northbridge Industrial Services (NBI) with a 400p target price. The broker noted today's in-line preliminary results and continues see strong medium-term growth potential in Northbridge. N+1 Singer pointed to a 2013 P/E multiple of 10.1 and an 2013 EV/EBITDA multiple of 8.4 to further argue that the shares remain inexpensive. The shares gained 3.5p to 327.5p.
Blue-Chips Pharmaceutical giant GlaxoSmithKline (GSK) announced that its new lung drug Breo Ellipta has been given the green light to come to market by an advisory panel to the U.S. Food and Drug Administration. The drug in question - developed with GSK's partner Theravance - is an inhaled drug for the treatment of smoking-related damage. According to analysts at Deutsche Bank the new treatment will generate 300 million pounds worth of revenues by 2016. The shares grew by 51p to 1,658p.. Mining group Fresnillo (FRES) revealed a 2.6% year-on year increase in silver production to 10.1 million ounces for the first three months of the year due to the continued ramp-up and higher than expected ore grades at the Saucito mine. However, the group also reported a 3.5% reduction in gold production to 117,512 ounces and blamed a reduced volume of ore deposited at Soledad-Dipolos site coupled with lower ore grade at its Ciénega project. The group went on to say that it will now review all expenditure and exploration projects in the wake of recent sharp falls in gold and silver prices. The shares inched up by 12p to 1'086p. Engineering business GKN (GKN) announced that trading over the first quarter of this year was in-line with its own expectations, with sales up by 9% year-on-year to 1.891 million pounds. The bulk of this increase was attributed to the impact of last year's acquisition of Volvo Aero - now renamed as GKN Aerospace Engine Systems. Despite this top line growth, pre-tax profits were actually down by 4% over the period to 119 million pounds, squeezed by a 23 million pounds charge for restructuring and a 19 million pounds hit from acquisitions over the period. The shares were pushed up by 6.3p to 252p. Drinks giant Diageo (DGE) delivered a 5% increase in organic net sales for the nine months ended 31st March driven by a 14% uplift in sales in the Latin American and Caribbean regions. The Guinness and Smirnoff brand owner was keen to stress that its US spirits brands "remain the key driver" of performance at Diageo North America and has benefitted from price increases since May, now delivering a "stronger price/mix". Recent consensus on the shares amongst brokers has been overwhelmingly positive with Liberum Capital, Berenberg Bank and Goldman Sachs all re-iterating their "buy" recommendations in the last week. The shares ended 3.5p higher at 1,978p. ADVERTISEMENT Spreadbet UK equities at t1pspreadbetting.co.uk - as well as Stock Indices, Commodities, Bonds & Forex - CLICK HERE to open an account at our brand new trading platform
Mid Caps Retailer Debenhams (DEB) announced a 5.4% decline in pre-tax profits to 120.3 million pounds for the 26 weeks ended 2nd March despite a Christmas-fuelled 3.6% increase in revenues. The company blamed the snowy UK weather in January as reason for why it did not achieve its expected level of profits, as many shoppers stayed at home, driving like-for-like sales down by 10% during the traditionally busy winter sales period. The shares closed up by 3.95p at 84.45p. Housebuilder Persimmon (PSN) declared that it has had a good start to the year, with visitor levels per site to its developments over the first fifteen weeks of the year 5% up on last year. The group also re-affirmed its aim of having 390 sites offering new homes to customers by 30th June 2013 in line with its previous guidance, up a further 5 from the current 385 sites in place. In a reflection of modestly increasing confidence in the housing sector, private sales per site were roughly 4% ahead of the previous comparable period while forward sales already achieved for the current year, including legal completions, were up by 11% at 1.38 billion pounds. The shares grew by 3.95p to 84.45p. Synergy Health (SYR), the provider of outsourced services to the health market, claimed it has had a robust first three months of the year. The group said it has been able to maintain its margins as a result of increased activity in the Dutch market and stressed that its cost-cutting programme continues to be successful. Furthermore, Synergy revealed that "Progress has been made with a number of contract bids" in development which it will elaborate upon on June 5th. The update has prompted Investec Securities to upgrade its "add" recommendation to a "buy" on the shares with a 1,105p target price. The shares jumped by 39p to 1,051p. Small Caps Microwave electronics products maker Filtronic (FTC) declared that it has made "good progress" with its LTE/4G mitigation filters - which prevent 4G services interfering with domestic television receivers in Europe - with delivery of the product starting last month. Subsequently, management feels that the group will now exceed market forecasts at both the top and bottom line, with revenues generated in the region of 38.5 million pounds. The shares increased by 11p to 63.5p. Europa Oil & Gas (EOG) has entered into a farm-in agreement with Kosmos Energy for two of its licensing options in the South Porcupine Basin offshore Ireland. Under the deal Kosmos will acquire an 85% interest and will become the operator of both licenses. In exchange Kosmos will completely fund the costs of both 3D seismic programmes as well as paying 85% of costs which Europa have already accumulated on the projects. The shares shot up by 1.5p to 9.625p. Mobile application provider Mobile Tornado Group (MBT) announced a 29% fall in revenues generated for 2012 to 1.45 million pounds as well as an increase in pre-tax losses from 1.2 million pounds to 1.8 million pounds. Mobile Tornado attributed the drop off in revenues to a 0.4 million pounds reduction in hardware and software sales. The firm went on to blame a 0.3 million pounds rise in operating expenses as a result of dealing with larger customers as further reason for the increase in losses. The shares were down by 1.25p at 25.75p. Security products provider Westminster Group (WSG) has secured a 5 million pounds equity financing facility with Henderson subsidiary Darwin Strategic. The agreement provides Westminster - whose share price has risen by a third since the beginning of last month - with a facility of up to 5 million pounds that can be drawn down at any time over the next three years. Westminster said that the access to the new funds will allow it to embark on new projects, building on a recently secured airport security project. The shares lost 1.5p to 41.25p. 
Oil exploration group Greka Drilling (GDL) has completed the first well under its contract with China National Petroleum Corporation. Greka used its LiFaBriC technology, which is an adaptation of the horizontal drilling methods traditionally used for coal seam reservoirs with the drill reaching a total depth of 1917 metres. The shares were up by 1.75p at 23.5p. IT support group Instem (INS) revealed that a "leading Chinese government research laboratory" has signed a contract to use its Provantis 9 study management software suite. The group also revealed that existing customers including , "a global top 10 pharma company, a mid-tier French pharma company and a leading American multi-national chemical corporation" have all upgraded to the Provantis 9 package, bringing the total number of users to 17. The financial details of the packages have not been disclosed. The shares swelled by 6p to 107.5p. Outsourcer Quindell Portfolio* (QPP) has acquired Inter8, a Software as a Service (SaaS) based provider to the North American insurance broker market. The terms of the acquisition will be satisfied by the immediate payment of 2.5 million pounds in cash, a further payment in cash of 2.5 million pounds in April 2014 and the issue over a three year period of 90,285,713 Quindell shares in three equal annual installments commencing April 2014. The acquisition - based on a 20.8 million pounds valuation of Inter8 and which implies a 17.5p Quindell share price - gives Quindell entry into the North American market, in a move which is expected to be significantly earnings enhancing in 2014. The shares inched up by 0.75p to 13.75p. * Quindell Portfolio is a corporate client of Rivington Street Holdings, the ultimate owner of UK-Analyst. | 
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