| From UK-Analyst.com: Thursday 2nd May 2013
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The Markets The European Central Bank (ECB) cut its main interest rate from 0.75% to a record low of 0.5% in a bid to get the Eurozone's economy moving again. The cut was widely expected and comes just two days after new data revealed that the unemployment rate across the region has hit a record high of 12.1%, while other figures showed that inflation in the region had fallen to 1.2.%. The news comes on a day which also saw new figures reveal that manufacturing activity in the Eurozone fell at the fastest pace for four months in April, with manufacturing in the supposed powerhouse of Germany declining for the second successive month. Nordea analyst Anders Svendsen gave his opinion on the rate cut and said, "The ECB is playing it safe, even though they know the effect is likely to be limited. The key for the market is the tone. If the ECB comes out with other measures as well to help SME(small- and mid-sized enterprise) lending that will be positive but if they say the cut was all they had, I think there will be disappointment" Here in the UK, construction activity showed signs of stabilising in April as the sector delivered its best performance in six months. The Markit/CIPS Construction Purchasing Managers' Index (PMI) rose from 47.2 in March to 49.4 in April, just under the threshold of 50 which separates growth from contraction but well above the average analyst estimate of 48. It is thought that the sector benefited from a "catch up" effect after widespread disruption caused by the cold weather in previous months delayed work being carried out. Tim Moore, Senior Economist at Markit, felt that the figures were promising and commented, "The overall survey findings are an early indication that construction will act as less of a drag on UK GDP over the second quarter of 2013." The US trade deficit narrowed by a more than expected 11% in March as imports of consumer goods and business equipment fell. The figures from the Commerce department in Washington revealed that the excess in the value of imports over exports stood at $38.8 billion - its second lowest level in three years. Sluggish demand for US exports from China and Europe has been more than offset by a dip in demand for imports as businesses stockpile less and households cut back on unessential purchases. CEO of Dow Chemical Andrew Leveris told his firm's story and explained, "We are seeing decent improvements in the United States as well as in southeast Asia and Brazil. But China has not seen strong market traction coming out of the Lunar New Year and conditions in Europe remain very weak." ADVERTISEMENT
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At the London close the Dow Jones grew by by 108.17 points to 14,809.12 and the Nasdaq increased by 34.04 points to 2,907.39. In London the FTSE 100 grew by 9.42 points to 6,460.71; the FTSE 250 finished 99.12 points lower at 13,930.23; the FTSE All-Share swelled by 0.64 points to 3,402.91; and the FTSE AIM Index inched up by 3.15 points to 713.87.  Broker Notes Panmure Gordon maintained its "buy" recommendation on online gambling group Betfair (BET), increasing its target price from 813p to 1,000p. The broker feels that the onus is on Betfair management to set out how it will deliver enhanced shareholder returns after it rejected a 880p per share offer and believes that it will rise to this challenge. Panmure's increased target price is based on a "sum of parts" analysis, valuing Betfair at 11.0x EBITDA, the non-TVG US development operations at 50 million pounds and the group's shareholding in Betfair Australia at 50 million pounds. The shares dived by 26.5p to 827p. Cantor Fitzgerald retained its "buy" recommendation on asset management firm Schroders (SDR) with a target price of 2,526p. The broker is impressed with today's IMS which revealed that assets under management have increased by 11.6% to 236.5 billion pounds and feels that the markets will react positively to this. Cantor was particularly impressed with the fact that net inflows were spread across all asset classes and all regions, highlighting the all round strength of the group. The shares increased by 11p to 2,336p. Canaccord Genuity retained its "buy" recommendation on software group Kofax (KFX) with a target price of 400p.The broker feels that the expansion of Kofax's product offering has allowed the company to gain the attention of C-level executives. Furthermore, Canaccord feels that the integration of mobile, capture and business process management allows Kofax to present a strategic value proposition to prospective clients rather than an IT sale - giving it a distinct advantage over its peers. The shares remained unchanged at 325p. Citron Research whacked a "sell" recommendation on US listed review website Angie's List (ANGI), labelling it the "most ridiculous, stupid, misunderstood, negligent, nonsensical, outdated, irresponsible business model in the new web economy". Citron goes on to argue that the group is guilty of misleading investors, creating the illusion that it has lost less money that it actually has. On the most optimistic analyst targets, according to the research group, the shares should be priced at between $5.50 and a $6.88 share, well below the $22.95 the shares are currently trading at.
Blue-Chips Broadcaster British Sky Broadcasting Group (BSY) announced a 6% increase in revenues to 5.38 billion pounds for the nine months ended 31st March, while pre-tax profits were up by 7.5% at 966 million pounds. This performance was boosted by a 715,000 uplift in subscripted products, which breached the 30 million mark for the first time. However, Sky conceded that these results could have been even better if it were not for an especially quiet post-Christmas period which resulted in a slight deceleration of earnings growth. The shares were up by 6p at 851p. Engineering heavyweight Rolls Royce (RR.) revealed that trading has been in line with its own expectations as it expects modest growth in underlying revenue and good growth in underlying profit to be delivered over 2013. The group highlighted its $1.6 billion (1.03 billion pounds) order from International Airlines Group (IAG) for Trent XWB engines to power 18 Airbus A350-1000 aircraft as evidence for its progress towards it 2013 targets. The shares slipped by 6p to 1,127p. Natural gas giant BG Group (BG.) reported a 3% drop in earnings to $1.2 billion (774 million pounds) for the first three months of the year in a reflection of delays in production and increased operating costs. While BG Group benefited from higher realised gas prices during the period, this was offset by a 3% decrease in production volumes to 59.3 million barrels of oil equivalent in a decrease significantly impacted by the shut-down of the Elgin-Franklin gas condensate field off the UK. Despite this drop in earnings, broker Oriel Securities retained its "buy" recommendation on the group. The shares climbed by 46.5p to 1,136p. Mid Caps Imagination Technologies Group (IMG), the processor technology company, warned that licensing revenue for the year will now come in below expectations, at around 27 million pounds, as several agreements have been subject to delays. This will result in profits being materially below market expectations for the current financial year. The group is adamant that this timing issue is a short-term issue related to the 'lumpy' nature of licensing revenues and stressed that its sales pipeline is growing, particularly in graphics and communications. The shares plummeted by 109.1p to 315.4p. Provider of mobile satellite services Inmarsat (ISAT) revealed that revenue and profitability for its US Government business in the first quarter will be lower than last year as a result of an abrupt slowdown in demand for its products, as cuts begin to take effect. In response to these conditions the group has pledged to address the cost base for the business unit. However, the group confirmed that total revenue was up by 2.4% for the first quarter, in an increase helped by a 8.7% uplift in revenues generated from its Maritime division. The shares were down by 58p at 691p. RPS Group (RPS), the resource exploration consultancy group, claimed that it is on track to produce results over the first 6 months of the year consistent with 2012 levels before an anticipated period of growth in the second half of the year. The group attributed this performance to the "reappearance" of a slowdown in investment in resources projects in the Australia and Asia-Pacific regions. Despite the warning, both Investec and N+1 Singer retained their "buy" recommendations on the group. The shares fell by 32.3p to 218.7p. 
Small Caps Electronics and ruggedised computers supplier Solid State (SSP) has acquired Q-par Angus, a microwave and radio frequency engineering firm, for a cash consideration of 900,000 pounds. Solid State explained that the deal was a bid to further internationalise its existing Steatite product range. Separately, the group confirmed that sales and pre-tax profits are expected to be in line with market expectations for the year ended 31st March 2013. The shares gained 11p to 216p. Zincox Resources (ZOX), the developer of Asia's largest zinc recycling project, posted revenues of $10.82 million (6.98 million pounds) for 2012, up from 2011's figure of $2.65 million (1.7 million pounds) but still lower than expectations. The group is continuing the process of positioning itself as a zinc producer but admits it has had some "teething problems", particularly mechanical problems relating to the corrosiveness of the material in the extraction process. The shares inched up by 0.25p to 18.25p. Coms (COMS), the Hosted VoIP business phone systems provider, revealed that it has acquired the broadband customers and certain other assets of So Purple Tech Limited, the internet technology group for a total consideration of 800,000 pounds. The consideration will be paid through 750,000 pounds worth of shares and 50,000 pounds in cash. The transaction is in line with the group's strategy of widening its customer base and increasing upselling opportunities. The shares grew by 0.1p to 2.2p. 
Diamond explorer Botswana Diamonds (BOD) has secured a three month extension on an agreement which will allow it to exclusively review data on 13 licence blocks in the southwest of the Orapa region of Botswana. This deal is an extension upon an original agreement which was penned in February with a private South African company, which held an 85% interest in the 13 licence blocks, to review the data and decide whether or not it wanted to acquire an equity interest in the licence areas. The exclusivity period had now been extended to 14th June. The shares ended the day 0.25p higher at 3.375p. Outsourcer Quindell Portfolio* (QPP) revealed that it has secured a yet another contract, this time with one of the UK's largest accident management companies. Management feels that revenues generated from this deal will exceed 36 million pounds annually and the profitability of this contract is expected to be consistent with the group's margin guidance of between 20% and 25%. The shares swelled by 0.125p to 13.625p. Oil and gas exploration group Leni Gas & Oil (LGO) has entered into an agreement with Meridian, a privately owned finance company located in the Cayman Islands, for access of up to $50 million (32.25 million pounds) of debt with a first draw down scheduled to be $20 million (12.9 million pounds). Management feel that the funding will help with the company's ongoing exploration programme in Trinidad and Spain - as a general means of accelerating growth. The shares jumped by 0.095p to 1.07p. * Quindell Portfolio is a corporate client of Rivington Street Holdings, the ultimate owner of UK-Analyst. | 
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