| From UK-Analyst.com: Tuesday 14th May 2013
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The Markets The European Central Bank (ECB) clashed with Germany over the timeframe in which the Eurozone should set up a full banking union. The ECB feels that a new union should be in place by mid-2014 but Germany is of the belief that any new arrangement will need more time to be implemented. EU leaders began laying the foundations for a union last year to smooth over frictions between nations and their banks in a trend which has plagued the Eurozone since the region's financial crisis began in 2008. The ECB today called for a central agency to be in place by "the summer of next year" while German officials warned that the bloc cannot embark on such a plan without changing its current treaties. European Central Bank Executive Board Member Joerg Asmussen commented, "We want a single European resolution regime together with a single resolution agency and a single resolution fund that is financed by a levy on the banking industry." Staying in Germany, investor confidence in the country rose by less than expected in May, further highlighting the economic uncertainty which plagues the Eurozone at present. The ZEW Center for European Economic Research revealed that its index of investor and analyst expectations inched up to 36.4 from 36.3 in April - well below the average analyst estimate for a jump to 40. This update comes despite recent releases revealing that industrial production and factory output both increased more than economists forecast in March. Guillaume Menuet, Senior Economist at Citigroup, commented, "The problem is that it seems to be the only big European economy growing, and that's why the crisis in the euro area is far from over." Back home, demand for homes in the UK reached a three year peak in April according to research from the Royal Institution of Chartered Surveyors (RICS). The findings reveal that 25% more chartered surveyors reported new buyer enquiries rose rather than fell last month, up from an increase of 13% in March. The figures come a week after lender Halifax reported that house prices had risen 1.1% in April on March in the strongest monthly gain since November. Peter Bolton King, RICS Global Residential Director was encouraged on the impact of new government initiatives which are aimed at making it easier for people to get on the property ladder but warned, "There are some understandable concerns that the measures will also lead to higher prices. In view of this, it is critical that developers are as good as their word and speed up the delivery of new stock." 
At the London close the Dow Jones was up by 73.46 points at 15,165.14 and the Nasdaq grew by 19.44 points to 3,001.53. In London the FTSE 100 grew by 54.30 points to 6,686.06; the FTSE 250 finished 77.79 points higher at 14.377.69; the FTSE All-Share swelled by 26.89 points to 3,519.54; and the FTSE AIM Index slid by 0.65 points to 717.20.  Broker Notes Canaccord Genuity retained its "buy" recommendation on payments provider Planet Payment (PPT) with a target price of 250p. The broker believes that Planet Payment is increasingly well positioned to be the multi-currency platform for emerging markets after signing contracts in Brazil, Indonesia, Mexico, UAE, Taiwan, the Philippines and Hong Kong over the past year. Canaccord expects that some of the fourteen contracts signed over the last year will significantly accelerate growth in H2, creating demand for the shares. Not today however, as they slid by 1.5p to 190p. Panmure Gordon retained its "buy" recommendation on business support firm Innovation Group (TIG) with a 38p target price. The broker does acknowledge there are some concerns with trading in Europe but remains confident on the company's prospects in the UK, US and South Africa. Furthermore, Panmure is excited on moves within the group to create a "One Innovation" entity across all geographic territories to increase operational efficiency. The shares edged up by 0.5p to 27.25p. N+1 Singer retained its "buy" recommendation on bicycle retailer Halfords (HFD) with a target price of 440p. The broker feels the recent Q4 update demonstrates the adaptability of the business model and sales mix. N+1 Singer believes the investment case remains both attractive and compelling and therefore increased its target price to 440p, based on a 15% EV/EBITDA sector premium. The shares jumped by 3.9p to 400.1p. 
Blue-Chips Water supplier Severn Trent (SVT) confirmed the validity of recent press speculation by revealing that it has received a takeover approach from a consortium comprised of Canadian firm Borealis, the Kuwait Investment Authority (KIA) and the Universities Superannuation Scheme. Although figures were not disclosed in the official company announcement, the consortium is believed to be willing to offer up to 23 pounds per share, valuing the water group at 5.3 billion pounds, a 26% premium to yesterday's closing price. While the group did confirm the approach, it did go on to stress that no proposal has been made and there can be no certainty that an offer will be made. The shares soared by 252p to 2,077p. Engineering support services group Babcock (BAB) announced a 6% increase in revenues to 3.243 billion pounds for the year ended 31st March, while underlying pre-tax profits were up by 16% at 317.8 million pounds. Growth was boosted by an 11% rise in revenues from the group's Marine and Technology division, which benefitted from the Queen Elizabeth aircraft carrier programme. Looking ahead, the group is adamant that it can continue to grow, stating that its "markets remain positive as the current economic climate continues to create long-term opportunities". The shares shot up by 74p to 1,163p. Outsourcer Capita (CPI) has secured 660 million pounds worth of new work since the start of the year, including contracts with the Cabinet Office, Carphone Warehouse and the University of Strathclyde. Capita also confirmed that it has made 7 acquisitions over the period for a total consideration of 165 million pounds. The group went on to say that, because of the strong start to 2013, it expects to achieve organic growth in line with expectations for the full year. The shares slid by 4.5p to 938p. Natural gas provider BG Group (BG.) revealed that its "immediate priority" is the delivery of its 2013 milestones and growth projects in Australia and Brazil. The group stressed that it was making "good progress" and expected to see "significant volume and cash flow growth" in 2014 and 2015 and that it would increase exploration spend over the next three years to $1.8 billion (1.2 billion pounds) per annum. The update comes a week after analysts at both Deutsche Bank and Canaccord Genuity retained their "buy" recommendations on the group. The shares were up by 41.5p at 1,227p.
Mid Caps Betting group Betfair (BET) has confirmed that all discussions with CVC Capital Partners over a possible takeover have now been terminated. Talks have ended after Betfair rejected a final 950p per share offer for the company, 8% higher than the 880p per share offer which was submitted last month. After further discussions the board concluded that "that none of the proposals represented adequate value or acceptable execution risk." and stressed that it remains confident in the company's growth prospects. The shares tumbled by 30p to 865p. Broker ICAP (ICAP) revealed a 12% decrease in revenue to 1.4 billion pounds for the year to 31st March, while pre-tax profits fell by 20% to 284 million pounds. The group cited the depressed global economy, a low interest rate environment and regulatory uncertainty for reasons for the deterioration in performance. On a positive note, the firm delivered cost savings of 60 million pounds, 10 million pounds more than previously announced. Broker Espirito Santo Execution Noble re-affirmed its "sell" stance on the back of the update but the markets ignored the advice, sending the shares up by 42.3p to 339.7p. Construction group Balfour Beatty (BBY) revealed that its trading performance has not changed since it updated the market with a profit warning last month. The group confirmed that revenues within its Construction Services division had fallen by 11% over the first three months of the year as activity in the UK fell particularly steeply. However, the group was keen to stress that trading within the group's Support Services division has been in line with expectations, boosted by the impact of the recent contract win with National Grid. The shares gained 6.5p, ending the day at 222.7p. Small Caps Nature Group (NGR) posted pre-tax profits of 0.47 million pounds for 2012, down from the 2.27 million pounds which were recorded in 2011. The waste management firm blamed an ongoing squeeze on volumes and margins in the international shipping markets as reasons for the decline in performance as well as a "number of operational reorganisations". The group, as one would expect, is confident on its future prospects and hinted at possible moves into Houston and the Middle East as it attempts to become a leading international maritime waste specialist. The shares decreased by 5.5p to 36.5p. E-therapeutics* (ETX), the drug discovery and development company, revealed that its lead cancer drug, ETS2101, exhibited positive results in tests when used on a patient with an untreatable cancer tumour. The company intends to move the cancer drug into efficacy trials if phase I trials over the coming year go well. Financially, E-therapeutics did not generate any revenues for the year ended 31st January 2013, a period which saw the group's loss before tax rise from 3.86 million pounds to 5.02 million pounds. However, the group remains well funded and it had 48 million pounds in cash and liquid resources at the end of March, which should be enough to fund its business into 2017. The shares were up by 3.75p at 33.75p. Investment management firm Jarvis Securities (JIM) claimed that it should exceed both revenue and profit expectations for the year. The firm, which also offers stockbroking services, also announced that it is declaring a second quarterly interim dividend of 3.5 pence per share, to be paid on 14th June 2013 to shareholders who are on the register on 24 May 2013. The shares shot up by 24.5p to 282.5p. Gold miner Minera (MIRL) revealed that gold sales were down by 13% year-on-year at 5,660 ounces over the three months ended 31st March, while the average realised gold price fell from $1,699 per ounce to $1,631 per ounce. Subsequently, the firm posted pre-tax profits of $0.2 million (0.13 million pounds), down from the $3.1 million (2.03 million pounds) which was recorded last year. The decline in performance was primarily a result of the anticipated lower grade ore which was extracted from the Corihuarmi Gold Mine in Peru. The shares dived by 4p to 20.5p. Business support services group Lombard Risk Management (LRM) announced that pre-tax profits were up by 56% at 3.9 million pounds for the year ended 31st March on a revenue increase of 31% to 16.8 million pounds. The group attributed the bulk of this growth to sales of its COREP product, a software package which specialises in European Banking Authority Common Reporting, and also to a good uptake in its REFORM product, a transactional reporting platform. The shares swelled by 0.875p to 11p. Bullabulling Gold (BGL) revealed that pit optimisations at the Bullabulling mine in Western Australia indicate that the costs of the project will be 20% lower than previously estimated. at around 850-900 pounds per ounce. The optimisations also suggested that the cash costs of the project will be substantially lower during the beginning of the project as the group initially target higher grade areas. The update comes after broker Westhouse Securities retained its "buy" recommendation on the group with a 21p target price. The shares gained 0.375p, finishing the day at 3p. * e-Therapeutics is a corporate client of Rivington Street Holdings, the ultimate owner of UK-Analyst. | 
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