Thursday's Stock Market Report from UK-Analyst: featuring Schroders, Tate & Lyle, Halfords, Delcam and AB Dynamics

From UK-Analyst.com: Thursday 7th November 2013 The Markets The European Central Bank (ECB) has unexpectedly cut interest rates from 0.5% to 0.25% in response to the recent fall in inflation on the continent. The ECB will now hope that the drop in interest rates will provide a boost to an economy which has struggled to truly gather any real momentum of late. The hope is that cutting the interest rate will make it easier for banks to borrow from the ECB, with the banks then able to lend funds to businesses at a cheaper rate. Here in the UK, the Bank of England kept rates unchanged at 0.5%. Carsten Brzeski, an analyst at ING said, "Deflationary risks and the stronger euro seem to have motivated the ECB's move. It is obvious that the ECB under president Draghi has become much more pro-active than under any of his predecessors." Meanwhile new data revealed that the US economy grew at an annualised rate of 2.8% over the July-September quarter, well up on the average analyst estimates. The figures from the US Commerce Department which outlined the above expected level of expansion in the world's largest economy were originally due to come out last month but were delayed as a result of the US government shutdown. The expansion in output was driven by rising exports, businesses replenishing their inventories and a surge in home building. Guy Berger, United States economist for RBS Securities commented "The fiscal drag will dissipate but we're far from takeoff. Large parts of the U.S. economy are advancing but at a pace people would consider to be disappointing." ADVERTISEMENT Get free trading guides from Evil Knievil (How to successfully short stocks), Zak Mir (Top AIM market picks for 2013) and other top financial commentators by CLICKING HERE At the London close the Dow Jones was up by 45.21 points at 15,701.67 and the Nasdaq was down by 41.8 points at 3,343.58. In London the FTSE 100 closed down by 44.47 points at 6,697.27 and the FTSE 250 was down by 14.31 points at 15,389.52. The FTSE All-Share slipped by 20.18 points to 3.567.42 while the FTSE AIM Index slid by 1.71 points to 813.71. Broker Notes Panmure Gordon stuck with its "buy" recommendation on shipping group Clarksons (CKN), increasing its target price from 2,000p to 2,500p. The broker is encouraged with the recent earnings acquisition of Gibb Tools and feels that the group is now in a prime position to capitalise on a likely recovery of global shipping markets. As a result, Panmure is increasing its forecasts for 2014 and 2015 and has thus increased its target price by 25% to 2,500p. The shares increased by 47p to 2,050p. N+1 Singer has re-affirmed its "buy" recommendation on lighting specialist Dialight (DIA) with a target price of 1,370p. The broker notes that the company has recently invested heavily over the last year to increase capacity and feels this is indicative of management's confidence in future growth. N+1 Singer is particularly impressed with the performance of Dialight over the last 10 months and feels that the company will hit its full year growth forecast of 70% this year. The shares were down by 17p at 1,018p. Canaccord Genuity cut its "buy" recommendation to a "hold" stance on fund manager Schroders (SDR) and increased its target price by 4% to 2,500p. The broker notes that the shares are currently trading on 19.5 times consensus earnings and 16.6x forward earnings. Canaccord argues that this valuation now looks full in the absence of stronger growth within the franchise. The shares plunged by 114p to 2,491p. Blue Chips Gold miner Randgold Resources (RRS) boasted an 80% increase in quarter-on-quarter revenues over the three months ended 30th September despite a 3% fall in the average gold price which was realised over the period. The increase in profitability was driven by a 19% increase in group production to 233,676 ounces coupled with a 17% reduction in total cash costs per ounce produced. The majority of the uplift in production was generated from its Loulo-Gounkoto mines in Mali. The shares surged by 280p to 4,885p. Sweetener manufacturer Tate and Lyle (TATE) announced a 6% fall in pre-tax profits to 158 million pounds for the 6 months ended 30th September. The makers of zero-calorie sweeteners explained that its results were negatively affected by a "soft" beverage season in the US. The update prompted Investec to retain its "buy" recommendation and 825p target price on the shares. The shares were down by 2.5p at 791p. Supermarket Morrisons (MRW) claimed that its performance over the third quarter of the year was in line with expectations, with like-for-like-for-like sales down by 2.4% over the period. The company partly attributed its downfall to its low exposure to online shoppers as well as its relatively small convenience store offering. However, the supermarket re-affirmed its intention to gain extra traction in these areas and said that it is progressing well with its online fresh food proposition. The shares fell by 0.9p to 280.1p. Mid Caps Automotive retailer Halfords (HFD) announced a 6.2% increase in like-for-like revenues for the 6 months ended 28th September, pushing pre-tax profits up by 5.2% to 44.6 million pounds. The group attributed the improvement to a combination of the increasing level of interest in cycling in the UK as well as the sunny weather over the summer months. However, the company - which operates 460 stores across the UK and Ireland - said there was still much work to do. The shares swelled by 59.3p to 478p. Property landlord Grainger (GRI) swung into a pre-tax profit position of 64.3 million pounds over the year ended 30th September, well up on the 1.7 million pounds pre-tax loss which was recorded. Grainger said that it was benefitting from the improving housing market in the UK but warned that more homes are needed to be built to avoid excessive house price inflation. The update comes after JP Morgan upgraded its "neutral" stance to an "overweight" recommendation on the shares at the tail end of last month, increasing its target price from 195p to 225p in the process. The shares increased by 9.1p to 206.1p. Provider of mobile global satellite services Inmarsat (ISAT) warned that 2014 profits will be squeezed by extra costs from certain projects, as well as lower spending from the US government. One of these delayed projects was the well-documented launch of Inmarsat's first Global Xpress which will provide the first global super-fast broadband services. Looking ahead, management conceded that a significant amount of costs would come on line before revenues next year. The shares fell by 19p to 695p. Small Caps Property developer Kimberly Enterprises (KBE) announced that its 50% owned joint venture with Heitman LLC has reached an agreement to sell its entire interest in Palace Engel sp zoo, the owner of a housing project in Poland. Kimberly will recognize a profit of 352,000 euros (293,500 pounds) as a result of the transaction with the proceeds being distributed to joint venture partners in accordance with the terms of the joint venture agreement. The shares jumped by 0.125p to 0.55p. Oil and gas investment company TXO (TXO) revealed that it has acquired a 15.1% stake in Oil Recovery Services Limited for 300,000 pounds. The transaction will be satisfied by the issue of 100,000,000 new Ordinary Shares in TXO at 0.3p per share - an 87.5% premium to yesterday's closing price. TXO management argued that the investment represented a chance to capitalise on the expected growth in the water contamination technologies which Oil Recovery Services specialises in. The shares were up by 0.025p to 0.19p. Software provider Autodesk has made an offer to acquire Delcam (DLC) in a deal worth 172.5 million pounds, as part of its strategy of expanding operations within the manufacturing sector. The offer equates to 20.75 pounds per share, a premium of 21% to Delcam's close on the AIM market yesterday. It now remains to be seen if Birmingham-based Delcam will accept the offer. The shares surged by 350p to 2,065p. MediaZest (MDZ) announced that it has won a multitude of contracts which will generate over 300,000 pounds this financial year. The wins include work to design and build of a large video wall project on behalf of a well-known financial institution located in the City of London. Other work includes the provision of a hologram display unit for another newly acquired corporate customer in the airport security and threat detection industry. The shares were up by 0.06p to 0.36p. Manufacturer of car testing equipment AB Dynamics (ABDP) announced that operating profits grew by 22% to 5.2 million pounds over the year ended 31st August as revenues swelled by 37% to 12.2 million pounds. However, pre-tax profits slipped slightly as a result of the costs of the firm's IPO which was carried out in May. Looking ahead, management said full year results should be in line with expectations for this financial year with a strong order book now in place. The shares increased by 21p to 191p. Recruiter Prime People (PRP) announced that pre-tax profits grew to 297,000 pounds over the 6 months ended 30th September, up from the 117,000 pounds it generated over the prior year period. The improvement was driven by the UK temporary recruitment services business as well as a fall in administrative expenses as the company strived to keep a handle on costs. The shares inched up by 2.5p to 75p. Audiovisual specialist Mirada* (MIRA) claimed that it has "made good commercial progress" over the first half of the year and highlighted a deal secured with a Latin American television operator as evidence for this. The deal in question relates to the deployment of Mirada's multi-screen product, Iris, in an agreement which will see the product used by several million of the operator's customers. Mirada said it is currently being paid in excess of $1.4 million (0.9 million pounds) in relation to the product, with most of this revenue set to be recognised in the second half of this financial year. The shares rose by 1p to 10.875p. * Mirada is a corporate client of a subsidiary of Rivington Street Holdings, the ultimate owner of UK-Analyst.

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