| From UK-Analyst.com: Tuesday 5th November 2013 The Markets The UK service sector grew at the quickest rate since May 1997 in October, fuelling hopes that the overall UK economy will exhibit a surge in economic growth across the final three months of 2013. Markit's purchasing managers' index rose to 62.5 in October, up from September's reading of 60.3, conflicting with analyst forecasts for a fall to 59.8. The expansion of the service sector - which accounts for around 75% of the total UK GDP - has consistently outperformed analysts' expectations this year and these latest figures also build on recent positive data surrounding the manufacturing and construction sectors in the UK. Jens Larsen, Chief UK economist at Royal Bank of Canada, commented, "We expect that the (BoE's) forecast will be similarly affected, with a stronger growth profile and a more rapid fall in unemployment compared to their August forecast." According to a recent study by the National Institute of Economic and Social Research (NIESR), the Bank Of England could increase interest rates during the second half of 2015 and before the unemployment rate hits 7%. The Bank of England has previously said that it would not consider increasing interest rates until the unemployment rate came down to 7%. However, the NIESR argued that the Central Bank could increase rates sooner in a bid to keep Britain's economy from overheating. NIESR director Jonathan Portes commented, "There may be a sense that consumer spending and possibly house prices are rising in a way that makes an ultra loose policy unnecessary." At the London close the Dow Jones was down by 28.45 points at 15,610.67 and the Nasdaq was down by 0.10 points at 3,384.65. In London the FTSE 100 closed down by 16.78 points at 6,746.84 and the FTSE 250 was down by 100.79 points at 15,367.61. The FTSE All-Share slipped by 15.02 points to 3.584.43 while the FTSE AIM Index inched up by 0.54 points at 811.63.  Broker Notes Panmure Gordon has lowered its "buy" recommendation to a "hold" stance on packaging specialist RPC Group (RPC), leaving its target price unchanged at 553p. The broker feels that RPC remains well placed, with the capability to drive returns further and improve acquisitions brought under the corporate umbrella. However, given the recent positive run in the share price, Panmure feels that it is now time to cut its stance. The shares inched up by 0.5p to 508p. Shore Capital stuck with its "buy" recommendation on recruiter Hays (HAS) before the upcoming investor day on Thursday. The broker feels that the UK business will benefit from the improvement in the UK economy as well as a return to a sales target-led structure for employees. Moreover, Shore Capital is encouraged by the recent closure of the company's India office as the group looks to keep a tight handle on costs. The shares slipped by 2.5p to 121p. Canaccord Genuity upgraded its "hold" stance to a "speculative buy" outlook on media group Next Fifteen Communications (NFC), retaining its target price of 94p. The broker feels that the company has recently made good strides in becoming a digital focused business and therefore believes that there is significant scope for a profits recovery. Canaccord also argues that the media group has a strong enough balance sheet to support bolt-on acquisitions. The shares jumped by 7p to 80p. Blue Chips Retailer Marks and Spencer (MKS) saw its underlying pre-tax profits slip by 9% to 261.6 million pounds for the 6 months ended 28th September, despite group sales inching up from 4.7 billion pounds to 4.9 billion pounds. The firm's food division continued to perform well with sales up by 2.5%. However, like-for-like sales in non-food items were down by 1.5% compared with the same period last year. In response to the update, broker N+1 Singer stuck with its "buy" recommendation and 600p target price. The shares grew by 21.9p to 509p. Insurance firm RSA Insurance (RSA) conceded that the recent bad weather in Europe and North America means that the company is likely to post 2013 full year weather losses which are "materially above planning assumptions". RSA explained that last week's storm and continuing adverse weather in Canada has meant that the group's return on equity would now be below 10% for 2013, down on the 10-12% estimate which was previously forecast. Furthermore, the insurer warned that the recent storm which hit the UK and Europe last week would result in a net loss of between 45-65 million pounds across the group's UK, Baltic and Scandinavian division. The shares slid by 8.1p to 121p. Cough causer Imperial Tobacco (IMT) posted a 16.7% increase in pre-tax profits to 1.26 billion pounds over the year ended 30th September, despite a 1% slide in revenues to 28.269 billion pounds. The Lambert and Butler brand owner went on to reveal that it will increase its dividend by at least 10% as a result of its increased profitability. Separately, Europe's second largest tobacco producer revealed that Non-Executive Chairman, Iain Napier, will retire from the Board next year after joining the company back in 2007. The shares grew by 72p to 2,382p. Mid Caps Audio and visual technology specialist CSR (CSR) saw underlying revenues fall by 11% to $252.1 million (157.1 million pounds) over the July-September quarter of 2013, with profits slightly down at $25.3 million (15.8 million pounds). CSR attributed the weakness to a decline in legacy revenues and weakness in the camera marketplace. The update prompted broker FinnCap to retain its "hold" recommendation and 577p target price on the shares, which fell by 28p to 518p. Retail property investor Intu Properties (INTU) claimed that it was encouraged by "signs of improvement" in the UK consumer environment, in a trend which should give the company grounds to charge retailers higher rents for space. The company - which owns some of the UK's largest shopping centres - hinted that it could seek partners in its attempt to fund its 1 billion pound pipeline of projects, which include modernising the Lakeside centre in Essex and the Victoria Centre in Nottingham. The shares dropped by 10.4p to 335.4p. Construction firm Balfour Beatty (BBY) said that trading developed in line with expectations for the three months ended 30th September across all of its businesses except its Professional Services business in Australia. However, management soothed investor fears by stressing that the group as a whole expect to exceed current market expectations for 2013 due to a larger contribution than previously anticipated from the Investments division. Deutsche Bank is currently an admirer of the shares and retained its "buy" recommendation and 28p target price at the back end of last week. The shares were down by 6.3p at 278p. Small Caps Software provider Intercede Group (IGP) confirmed that it has secured a contract with a major US aerospace contractor under which its software will be used to manage the identity credentials of more than 500,000 employees across the sector. Although Intercede did not reveal the financial details of the agreement, the company did say that revenues would contribute to the current year's financial period and beyond. The shares jumped by 8.5p to 143.5p. Mobile payment facilitator Bango (BGO) revealed that it is expanding into the lucrative Asian market by opening an office in Singapore. This follows the company recently completing integrations with local mobile operators, including DTAC in Thailand and Globe in the Philippines. Bango also explained that it was leveraging its new relationship with Google Play and other digital powerhouses to effect growth in other international territories. The shares were up by 23p at 152.5p. Video search owner operator Blinkx (BLNX) announced a 335% increase in pre-tax profits to $10.8 million (6.7 million pounds) for the 6 months ended 30th September as revenues swelled by 36% to $111.6 million (69.6 million pounds). These improvements were delivered despite the tough comparative prior year period which benefitted from one off events such as the Olympics and the US presidential election. Shares in the company - which have already risen by 160% this year - continue to be a top pick amongst investment banks, with the likes of Numis and Citi being long-term buyers of the stock. The shares swelled by 29.75p to 197.75p. 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 
Financial software provider First Derivatives (FDP) saw its revenues increase by 25% to 34.4 million pounds for the 6 months ended 31st August, while pre-tax profits slipped by 15% to 3 million pounds. In a call with management today, CFO Graham Ferguson explained that this fall in profits had come about as the company invested in its product offering in a bid to differentiate itself in what is a fiercely competitive financial software sector. The shares ticked upwards by 25p to 847.5p. Vetinary medicine supplier Animalcare Group (ANCR) announced that trading over the last four months has been in line with management expectations. The firm was quick to praise the launch of an enhanced version of its Phenoleptil medicine, a product used in the prevention of epileptic seizures in dogs. Today's AGM statement also confirmed that the firm is to issue an increased final dividend of 3.8 pence per share, giving a total dividend for the year of 5.3 pence per share, 17.8% higher than the previous year. The shares remained flat at 178p. PPHE Hotel Group (TAVI) announced that revenues were down by 2.1% at 64.7 million euros (54.3 million pounds) over the third quarter of the year but insisted that full year results would be in line with expectations. The hotel operator blamed the impact of last year's Olympics on the shortfall as the games gave the company the leverage to charge higher prices over the July-September quarter last year. Looking ahead, the company is confident on its short-medium term prospects with market conditions apparently on the up across some European territories. The shares fell by 2.5p to 325p. | 
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