ADVFN Morning Euro Markets Bulletin - March 22nd 2011

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London Market Reports
A bit of momentum is building behind Footsie now, with fund managers and life groups going well.

Schroders and Prudential are two of the best performers after the Dow rose again overnight to climb back through the 12,000 mark.

Cairn Energy has yet to reach an agreement with the Indian authorities over the proposed sale of its Rajasthan assets to Vedanta. Hopes had been raised that Cairn would announce a deal had been struck with today’s results, but the group just repeated that the sale of its 51% stake in Cairn India is awaiting approval. Cairn posted a net profit of $1.08bn in 2010, up from $53m.

Punch Taverns, the biggest pubs group in Britain, is to split itself in two by the end of the summer and sell thousands of boozers. The review, which started in October, has concluded that the way forward is to separate the Spirit managed pubs business from the struggling leased operation - Punch. This will create two independent public companies and allow the investment and development needed to speed up its operational turnaround and drive growth.

Ports operator Forth Ports has agreed a bid worth 1,630p a share from major shareholder, the Arcus European Infrastructure Fund. Shareholders will also get to keep the proposed final dividend of 20p a share expected to be paid on 13 May. "The Arcus offer gives Forth Ports shareholders the opportunity to realise their investment for cash at a fair price,” chairman David Richardson said.

Treatt, which makes ingredients for the flavour, fragrance and cosmetic industries, said results for the full year are expected to be materially higher than previously anticipated after strong trading at its US division. Trading during the half year 'significantly exceeded expectations' while order books have remained strong, the group.


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UK Event Calendar
Tuesday March 22

INTERIMS
1Spatial Holdings

INTERIM DIVIDEND PAYMENT DATE
Gartmore Irish Growth Fund

GMS
Gartmore Irish Growth Fund, JJB Sports

FINALS
Atlantic Global, Cairn Energy, Corin Group, Dolphin Capital Investors Ltd., DRS Data & Research Services, Energetix Group, Forth Ports, Instem Life Science Systems, Morson Group, Planet Payment Inc. (Reg S), Severfield-Rowen, Shore Capital Group Ltd., Source BioScience, Vphase, Xaar

IMSS
Southern Cross Healthcare Group

EGMS
Datang International Power Generation Co Ltd., Henderson Group

AGMS
Andor Technology, Southern Cross Healthcare Group, St. Modwen Properties

TRADING ANNOUNCEMENTS
Dolphin Capital Investors Ltd.

INTERNATIONAL ECONOMIC ANNOUNCEMENTS
Supermarket Sales (JPN)
Convenience Store Sales (JPN)
Richmond Fed Manufacturing Index (US) (14.00)

UK ECONOMIC ANNOUNCEMENTS
Consumer Price Index (09:30)
Retail Price Index (09:30)
Public Sector Finances (09:30)
CBI Industrial Trends Surveys (11:00)

FINAL DIVIDEND PAYMENT DATE
Framlington AIM VCT

Q1
Carnival



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European Market Reports
European stocks could move slightly lower on Tuesday, notwithstanding positive Asian cues, after reports of rising smoke and steam from two of the damaged reactors at Japan's quake-hit Fukushima nuclear power plant suggested the battle to avert a disastrous meltdown and prevent radiation risks was far from over.

In Asia, the benchmark indexes in Australia, China, Hong Kong, Singapore, South Korea and Taiwan rose by 0.1-0.7 percent on Tuesday, as a positive lead from Wall Street overnight and news that the Bank of Japan will continue its emergency fund provision to soothe jittery markets helped boost investor sentiment.

Japan's Nikkei index climbed 4.36 percent, playing a catch-up with yesterday's rally in the global markets. Brent crude futures are slightly weak below $115 a barrel, while the Dow futures are little changed.

On the macroeconomic front, investors await data on British consumer price inflation and public sector finances for direction. U.K.'s annual inflation is expected to rise to 4.2 percent in February from 4 percent in the previous month. On a monthly comparison, consumer prices are forecast to grow 0.6 percent. Meanwhile, British public sector net borrowing is seen at GBP 7.6 billion in February.

In corporate news, Brenntag AG said that its current COO Steven Holland will assume his new role as CEO on June 22 following the company's general shareholders' meeting.

Bayer HealthCare Pharmaceuticals, a U.S. subsidiary of German health care and materials company Bayer AG, is getting ready to fight a gender discrimination lawsuit which is claiming damages worth $100 million.

Mobile handset maker Nokia Corp. announced the launch of smartphone Nokia Astound, which will be available exclusively from T-Mobile U.S.A., the unit of Germany's Deutsche Telekom AG, beginning April 6.

Drug maker Merck & Co. Inc. and French pharmaceutical giant Sanofi-aventis revealed the mutual termination of their agreement to form a new animal health joint venture by combining Merial, the animal health business of sanofi-aventis, with Intervet/Schering-Plough, Merck's animal health unit.

London-listed Essar Energy said it expects to acquire Royal Dutch Shell's Stanlow refinery in northwest England by the end of this month.

European stocks clawed back recent losses on Monday, as investors cheered major merger news from the telecom sector, where Deutsche Telekom sold its T-Mobile USA unit to AT&T Inc. for $39 billion. Hopes that Japan's nuclear crisis will end without a catastrophic meltdown also lifted spirits.

The Euro Stoxx 50 benchmark index of Euro zone blue chippers rose 2.4 percent, the Stoxx Europe 50 added 1.8 percent, Germany's DAX advanced 2.3 percent, France's CAC 40 gained 2.5 percent and the U.K.'s FTSE 100 ended up 1.2 percent.

On Wall Street, stocks turned in a strong performance on Monday, continuing to recover from the sell-off that was seen early last week, as news on the merger-and-acquisition front as well as easing concerns about the nuclear crisis in Japan boosted sentiment. The Dow and the S&P 500 rose about 1.5 percent each, while the Nasdaq climbed 1.8 percent.


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US Market Reports
Wall Street made good gains as Japan’s nuclear crisis becomes less of a worry and a telecoms mega-merger revived big deal talk.

Dow Jones closed up 178 at 12,036, Nasdaq Composite added 48 points at 2,692, and the broader S&P 500 was 19 better at 1,298.

AT&T is paying $39bn for Deutsche Telekom's T-Mobile USA to create a new US mobile phone powerhouse.

AT&T is the US’s second largest US mobile group behind Verizon Communications, but a tie-up with T-Mobile would add 34m customers and give it a combined market share 43% against Verizon’s 35%.

Analysts said the price is high, but underlined AT&T’s desperation to cement its place in the fast growing data, video and apps market.

Sprint Nextel is lower after it lost out in the battle for T-Mobile, while there are worries that mobile phone maker Motorola Mobility may lose some of its pricing power when faced with such a large customer.MetroPCS Communications, US Cellular and Leap Wireless International have been named as possible bid targets in the telecoms sector.

Luxury retailer Tiffany was the best performer in the S&P 500 on stronger than expected results. It earned $181.2m, or $1.41 a share for the three months, up from $140.4m, or $1.10 a share, the year before.

Oil giants Exxon Mobil and Chevron boasted chunky gains as the UN military attack on Libya and ongoing unrest in Bahrain intensified concerns about supplies. Crude prices are up $1 in New York, trading at around $102 a barrel, although they’d been above $104 earlier.


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Newspaper Round-up
The Big Six household energy suppliers have been spared an industry-wide Competition Commission investigation, despite Ofgem finding evidence that they may be profiteering, manipulating their own figures and misleading consumers.

Alistair Buchanan, Ofgem’s chief executive, said: “Energy companies have failed to play it straight with consumers.” But rather than mire the industry in what might be a formal competition investigation lasting years, he said that Ofgem had the powers to whip suppliers into shape. It is understood that Ofgem has serious concerns over transfer-pricing, in which suppliers pay their own power stations more for electricity than on the open market, the Times reports.

The “wrong kind of inflation” will mean the government has to borrow significantly more over the medium term than planned, George Osborne will be forced to admit in the Budget. The chancellor is planning a “Robin Hood” budget that closes tax loopholes used by the rich and introduces a “Learjet levy” on people using private jets. The £1bn in extra taxes will fund small sweeteners to motorists, low earners and holidaymakers. But the deterioration in the medium-term government borrowing numbers – in spite of a lower deficit than forecast in November – will cast a shadow over Mr Osborne’s deficit reduction programme, the FT writes.

Essar Energy will clinch the purchase of the Stanlow oil refinery from Shell within days. The sale of the $350m facility near Liverpool will mean that four of Britain’s eight refineries have changed ownership within a couple of years, with a further two up for sale. The Times has also learnt that Esso has put a package of about 50 garage forecourts up for sale as changes in the petroleum market reach the high street, the Times reports.

Warren Buffett cheered markets yesterday as he used a visit to South Korea to tell investors that the earthquake and tsunami that devastated northeast Japan nine days ago would not derail the country’s economic future. In a symbolic gesture of confidence, the billionaire investor said that although the natural disaster was an “enormous blow” for Japan, it presented a buying opportunity for investors, the Times reports.

Britain will get a tough new set of takeover rules, a year after Kraft’s hostile takeover bid for Cadbury prompted calls for UK companies to be protected from corporate raiders. The Takeover Panel said yesterday that the balance of power had shifted too far in favour of bidders at the expense of companies and their shareholders. The regulator published a draft code that will severely restrict bidders that rely heavily on bank debt, such as private equity firms, foreign sovereign wealth funds and entrepreneurs, the Times reports.

Britons are suffering their biggest drop in living standards for 30 years, according to a new report by the Institute for Fiscal Studies (IFS). The average household's "real" income – what is coming in after inflation is taken into account – will have fallen by 1.6% over the three years to the end of 2011, the influential think-tank said ahead of Wednesday's Budget. In contrast, over the previous half a century, real incomes rose an average 1.6% a year, or 5% every three-year period, the Telegraph reports.

The chief executive and chairman of New Look are both quitting, following a dire year during which the company pulled a £1.8bn flotation, faced a damning investigation by Channel 4, posted tumbling sales and suffered disruption by moving head office staff from Weymouth to London. In a terse statement, New Look said that Carl McPhail had "resigned" from the board with "immediate effect" and that John Gildersleeve, its non-executive chairman since January 2010, intended to "retire" to focus on his "other business interests". Tom Singh, who founded New Look in 1969 and still holds a 22.4% stake, has returned to the retailer as interim chief executive, the Independent reports.

Citigroup, the global banking organisation which twice had to be bailed out by taxpayers in the United States, is to restart paying dividends to shareholders, two years after suspending the payout. The bank is the latest US institution to announce it will resume the return of cash to shareholders, following a decision by the Federal Reserve on Friday that the American banking system is no longer in danger, the Independent reports.

Hedge funds should accept higher taxes as the cost of doing business in London and stop threatening to move elsewhere, according to one of the world’s best-known copper traders. Michael Farmer, a Conservative party donor who runs the near-$1bn Red Kite metals hedge funds, is rare among managers in defending London, with many others telling the government that the 50% top tax rate is hurting their ability to attract the best traders, the FT reports.

Barclays is among a group of investors weighing a rival bid for a portfolio of mortgage-backed securities that has already drawn a $15.7bn offer from AIG, people familiar with the matter said. The securities are owned by the Federal Reserve Bank of New York and housed within Maiden Lane II, one of the special-purpose vehicles created as part of the insurer’s $180bn rescue during the financial crisis, the FT reports.