From UK-Analyst.com: Thursday 23rd May 2013
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The Markets Global stock markets took a substantial hit on the back of underwhelming Chinese data and indications that the US Federal Reserve could cut back on its stimulus program. Chinese factory activity contracted for the first time in seven months during May, casting further doubt on whether the nation's economy will be able to meet the government's 7.5% growth target for this year. Meanwhile, over in the United States, minutes from the latest Federal Reserve meeting revealed that some officials were keen on cutting back the current stimulus scheme as early as next month. The combined gloom from these pieces of news hammered the FTSE 100 downwards by 2% this morning, while Japan's Nikkei index closed down by 7.3%. Matt Basi, head of UK sales trading at CMC Markets commented, "Equity markets are taking a well-earned breather this morning after the latest Fed minutes sparked speculation that Chairman Bernanke's asset purchase programme could dry up as soon as June of this year." ADVERTISEMENT Claim your complimentary book "Investing with Anthony Bolton", one of Britain's most successful investment managers
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The Office for National Statistics (ONS) confirmed the 0.3% preliminary UK GDP growth figure it released back in April, rubber-stamping the fact that the region escaped a triple dip recession in the first quarter of the year. Alongside the confirmation, the ONS said growth has been slowed by weakness in the domestic and global markets, while slower wage growth in the UK has dented people's ability to spend and, in turn, is risking prospects for future growth. The main driver of growth was the services sector, which expanded by 0.6%, above pre-financial crisis levels. However, the confirmation did not convince everyone, with Martin Beck, a UK Economist at Capital Economics, warning, "With employment and average earnings both dropping in the first quarter on their level in the previous quarter, the foundations for a sustained recovery, even one driven by consumers, still look pretty rickety." The Eurozone services sector recovered somewhat during May according to Markit's flash Eurozone Services PMI - a survey which gathers opinion from 2,000 companies. The PMI services index rose in May to 47.5, a three-month high, from 47.0 in April, edging closer to the 50 mark which separates growth and contraction. Chris Williamson, Chief Economist at Markit said "There are signs the rate of decline is easing, which does suggest we may be moving into a period of stabilisation, but it's taking a lot longer than most people anticipated." At the London close the Dow Jones was down by 7.06 points at 15,300.11 and the Nasdaq was down by 2.1 points to 2,997.03. In London the FTSE 100 fell by 143.48 points to 6,696.79; the FTSE 250 finished 316.42 points higher at 14,507.72; the FTSE All-Share was down by 75.50 points at 3,529.23; and the FTSE AIM Index slipped by 8.34 points to 724.75.  Broker Notes Panmure Gordon retained its "sell" stance on electronics distributor Electrocomponents (ECM) with a 175p target price. The broker feels that Electrocomponents continues to operate in tough markets, citing the fact that today's full year results exposed a 19% fall in pre-tax profits. Panmure also notes that Chinese manufacturing data slipped today and feels that this only adds to an already gloomy outlook for the company. The shares were down by 10p at 265.5p. N+1 Singer maintained its "buy" stance on clean energy group Greenko (GKO) with a target price of 163p. The broker is encouraged by the construction status of the next 200MW of wind capacity, which is expected to be complete during this financial year. N+1 Singer feels that this should be enough time for some of the assets to "catch" the monsoon season next year, and therefore be a significant growth driver for FY15. The shares slipped by 1.5p to 122.5p. Canaccord Genuity stuck with its "buy" stance on international payments facilitator PayPoint (PAY) with a target price of 999p. The broker notes that the company has issued a special dividend and is impressed with the firm's ability to pay a generous income while investing in its network and its services. Canaccord is also encouraged on Paypoint's new "cash out" facility which is creating new revenue streams and also tightening the relationships between PayPoint, the retailers and its customers. The shares increased by 24.5p to 914.5p. 
Blue-Chips Drinks supplier SABMiller (SAB) announced a 10% increase in group revenues to 34.5 billion pounds for the year ended 31st March, while adjusted pre-tax profits were up by 11% at 5.63 billion pounds. The London-based brewer of Peroni attributed its success to a 4% growth in volumes in the Asia-Pacific, African and European markets, boosted by new products and an expansion of brand portfolios. Looking ahead, SABmiller confirmed that it expects input costs to rise by low to mid-single digits but stressed that it will implement selective price increases to combat the effect of this. The shares dived by 74p to 3,462p. Energy services firm Wood Group (WG.) has secured a deal which will see it deliver operations & maintenance services to Hess Corporation's Baldpate production platform in the deepwater Gulf of Mexico over a five year period. Under the deal, Wood Group will also provide similar services at the Mississippi Canyon and Green Canyon regions of the Gulf of Mexico when they come on stream. The financial details of the deal were not released. The update comes just one day after Galvan Research retained its "buy" recommendation on the shares with a 900p target price. The shares slid by 10p to 838p. Lancashire based utility provider United Utilities (UU.) posted a 2.2% increase in underlying pre-tax profits to 607.1 million pounds for the year ended 31st March on a 4.5% increase in revenues to 1.636 billion pounds. The increase in profits was primarily driven by
the regulated price increase for 2012/13 of 5.8%, although the impact of this was dented as volumes fell with customers continuing to fall away as meter usage continues its upward trend in popularity. The shares climbed by 6p to 787.5p.
Mid Caps Food wholesaler Booker Group (BOK) announced a 3.5% increase in total sales over the 52 weeks ended 29th March 2013 while pre-tax profits rose from 89.7 million pounds to 101.4 million pounds over the period - well above the average analyst estimate of just 96 million pounds. Booker, which operates 170 sites in the UK, cited the impact of increased demand from small retailers and growing online sales as reasons for its improved performance. The results are rather impressive when considering the backdrop of a downturn in the UK cash and carry market as customers increasingly shop at local convenience stores. The shares were up by 0.1p to 129.8p. Healthcare group BTG (BTG) confirmed that it has agreed to buy EKOS Corporation, a profitable interventional vascular business, for a consideration of 120 million pounds. The acquisition is in line with BTG's strategy of expanding its interventional medicine business and increasing potential revenue prospects by expanding its customer base. News of the acquisition prompted broker Shore Capital to retain its "buy" recommendation on the group . The shares inched up by 1.1p to 339.5p. Pub operator Mitchells and Butlers (MAB) announced a 2.3% increase in revenues to 991 million pounds for the 28 weeks ended 13th April, while operating profits grew by 5.1% to 145 million pounds. The uplift in results was attributed to the contribution from new pubs and restaurants and an increase in food sales, which now account for 51% of total group sales. However, the group warned that it expects consumer confidence and discretionary income growth to remain subdued in the short-term and conceded that the "more affluent" areas in London and the south east will remain the pivotal drivers of growth going forward. The shares fell by 13.3p to 395.2p. Small Caps Mobile technology group Belgravium Technologies (BVM) conceded that 2013 has started slowly, with order intake and sales revenues being lower than anticipated. However, the group was keen to stress that its sales and marketing activities have developed a good pipeline of sales opportunity over the period. This, coupled with the acquisition of Feedback Data plc, gives the group confidence that the rest of year will deliver an improvement. The shares lost 0.25p, finishing the day at 2.5p. Investment group Conygar Investment Company* (CIC) announced a NAV per share increase to 166.1p from 165.9p over the six months ended 31st March, with net property income up by 0.3 million pounds to 6.6 million pounds. The group pointed out that it had made "good progress" on its development projects and investment property portfolio as it has implemented a number of asset management initiatives. Oriel Securities currently has an "add" recommendation on the shares, confident on the group's future prospects. The shares decreased by 6.75p to 118p. EMED Mining* (EMED) confirmed that production commissioning of the first mine at Rio Tinto's Spanish copper project remains scheduled to start in the middle of next year. EMED went on to insist that it has completed the design work to satisfy demands from regulators following reviews from independent experts. Before production begins next year, EMED is committed to implementing preliminary site works in the third quarter of this year. The shares tumbled by 1.125p to 7p. Business support services group Crimson Tide (TIDE) has won three new contracts with Integrated Cleaning Management, NIC Services Group and Wing's Technical Services with a combined value of 130,000 pounds. The contracts are all in relation to the provision of Crimson's mpro5 tool - a mobile package which attempts to improve business efficiency by removing unnecessary paperwork. The shares edged up by 0.05p to 1.35p. Oil exploration group Nighthawk Energy (HAWK) revealed that it has encountered a significant amount of oil at its Smoky Hill project in Colorado's Denver-Julesburg Basin. According to tests, the Nig Sky 4-11 well has the potential to produce 200-300 barrels per day of high quality oil with negligible quantities of water production. Production is expected to begin by next week. The shares were up by 0.46p at 4.56p. Electronics distributor Advanced Power Components (APC) confirmed that it has acquired the remaining 49% of the issued share capital of Minimise Limited which it does not already own. APC will pay 850,000 pounds in cash as well as 3.8 million pounds worth of shares to secure the deal. Management explained that the acquisition was an attempt to capitalise on the "significant growth potential of the cleantech sector". Separately, the group confirmed that it has conditionally raised gross proceeds of 3 million pounds through a placing with institutional investors. The proceeds of the fundraise will be used to fund the cash element of the Minimise Acquisition and to fund other potential future cleantech acquisitions. The shares remained unchanged at 31.75p. * Conygar and EMED Mining are corporate clients of Rivington Street Holdings, the ultimate owner of UK-Analyst. | 
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