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 |  Subject: ADVFN Morning Euro Markets Bulletin March, 29th 2010  Mon Mar 29, 2010 9:26 am | |
| by ADVFN.comADVFN offer FREE streaming stocks and shares data form around the world. SEE | London Market Report |
Footsie starts brightly
London has opened the shortened week on the front foot with telecoms and miners leading the index higher.
Vodafone is higher on reports over the weekend it is in talks about resolving the future of its US mobile phone joint venture, Verizon Wireless. Several options are being discussed including a full merger of the two companies or dividends
Rio Tinto executive Stern Hu was sentenced to 12 years in jail in China on charges of bribery and commercial espionage. Reports said Mr Hu apologised to the court and to Rio, saying he took more than $900,000. Three other Rio employees also received heavy sentences.
Sports Direct confirmed it is ‘seriously considering a material increase in the level of its indicative bid’ for Blacks Leisure and accused its potential target of breaching the takeover code as the battle turns increasingly acrimonious.
The demerger of TalkTalk Telecom from Carphone Warehouse has become effective, with trading in TalkTalk and the new incarnation of Carphone Warehouse starting on Monday morning.
Care home operator Southern Cross has been hit by lower than anticipated average occupancy and local authority fee settlements. Southern Cross had budgeted for a 2% local authority fee increase, but this will now be about 1%, though cost cuts will offset some of the shortfall. Private fee increases were 3.7%.
Infrastructure contractor Balfour Beatty has won contracts worth a combined £200m from the Highways Agency, Yorkshire Water and Anglian Water, plus a £250m contract from the North East Lincolnshire Council.
Shares in South Atlantic oil explorer Desire Petroleum collapsed on a disappointing first drill result in the waters around the Falkland Islands.
Investment firm 3i Infrastructure said the market environment for infrastructure investment is improving and added that its portfolio is performing well and continues to deliver a good yield. The group invested £73.3m in the period from 1 April 2009 to 29 March 2010 and realised £25m. The company had cash balances of £310.6m at 29 March and no borrowings.
Cameroon-focused oil explorer Bowleven has its first two wells prepared and ready to drill as part of an extensive exploration of its acreage over the next 12-18 months.
Cancer specialist Antisoma put a late-stage trial of its lung cancer drug ASA404 on halt after test results showed that there was little or no prospect of demonstrating a survival benefit. Antisoma licensed the worldwide rights to the drug to Swiss pharma giant Novartis in April 2007. |
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| | UK Event Calendar for today |
Compass Group, Dairy Crest, Tate & Lyle
A number of food companies are bringing out figures next week which, coincidentally, is the last week of Lent, a period in which many Christians traditionally forgo rich foods.
Pizza delivery firm Domino’s Pizza, dairy firms Robert Wiseman and Dairy Crest, caterer Compass Group, M&S food supplier Northern Foods, sugar and sweeteners group Tate & Lyle and meatpacker Hilton Food are all on the menu.
Compass Group releases its pre-close trading update on the last day of the month and the market will be looking to see whether the company’s organic growth has made the transition from not declining so sharply to actually improving on a year on year comparative basis.
The group said in February that organic revenue improved from a decline of approximately 3% in the fourth quarter of 2009, to a decline of 1.7% in the first quarter of this year, with all four of its geographic regions ahead quarter on quarter.
Dairy Crest is probably best known for its Cathedral cheese and Country Life butter but it is also a major milk supplier. Broker Panmure Gordon is expecting revenue growth from Dairy Crest’s five key brands to offset a tail-off in the dairies business. ‘We forecast a 5% decline in revenues to £1,633m, but a 4.4% improvement in group PBT [profit before tax] to £83.0m,’ Panmure Gordon said.
INTERIMS
BowLeven
INTERIM DIVIDEND PAYMENT DATE
Mountview Estate, Quayle Munro
QUARTERLY EX-DIVIDEND DATE
Yamana Gold Inc
INTERNATIONAL ECONOMIC ANNOUNCEMENTS
Personal Income (US) (13:30)
Personal Spending (US) (13:30)
GMS
Eurovestech
FINALS
Afren, Archial Group, Dana Petroleum, Depa Limited GDR (Reg S), Lamprell, PowerFilm (Reg S)
ANNUAL REPORT
Goldenport, Henderson High Income Trust
SPECIAL DIVIDEND PAYMENT DATE
Fidessa
EGMS
Kenmare Resources, Petrofac Ltd
AGMS
Cenkos Securities, Chromex Mining, Creat Resources Holdings Limited, European Nickel, Minoan Group, Pinnacle Telecom Group, Temple Bar Inv Trust, XP Power
TRADING ANNOUNCEMENTS
Goldenport
FINAL DIVIDEND PAYMENT DATE
Fidessa |
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| | Currencies Market Report |
Euro pulls back from its lows
The Euro has continued to gain ground in early trading in Asia after last weeks accord by European leaders with respect to emergency help for Greece if they need it.
As such the dollar is slipping back against both the Euro and the pound. Having achieved this hard won emergency help Greece now has to prove they have the determination to keep the nations finances on an even keel.
Between now and the end of May they need to raise around €20bn and with Greek bond yields at current levels this could prove quite an expensive process unless these yields start to slide back.
EU consumer confidence released later today is expected to show a rise to 97.1 from last months 95.9 and this has buoyed the Euro in the short-term, while German inflation data is also expected to show a mildly positive bias.
The agreement last week has bought the Euro some time but nothing more. A number of significant people in Europe have come out of this crisis looking less than accomplished. Trichet has been damaged by vehemently opposing IMF aid saying it would be "very very bad" and then being forced to retract those words hours later, and then being forced to concede, albeit reluctantly, that it is necessary.
President Sarkozy of France has also been forced into a humiliating u-turn in accepting IMF help after being vehemently opposed to it.
What this crisis has done, with the involvement of the IMF, is highlight starkly the Euro zones inability to be able to resolve its problems independently.
Sterling has been slightly boosted by some opinion polls at the weekend showing a slight revival in Conservative fortunes; however the over-riding fear remains that of a hung parliament and that will continue to weigh. UK figures out today include M4 money supply for February which need to show continued improvement, as well as new mortgage approvals for February.
EURUSD - the Euro has continued to pare some of its losses in early Asia trade after breaking below 1.3300 last week. Certainly the agreement of a mechanism to aid Greece access emergency funding has prompted some short-covering and we could see a move towards 1.3500. A low last week of 1.3270 has been the extent of the declines so far. Any rallies should now find selling interest around the 1.3450 levels, up towards 1.3500.
GBPUSD - downside pressure continues to remain intact with a low of 1.4812 last week just shy of the February lows of 1.4780. The failure to close below 1.4850 on a weekly close could well precipitate a move back towards 1.5020, but overall sterling weakness id the predominate theme. The test of 1.4400 in the near term remains the overall longer term target.
There is resistance around the 1.4970/80 area as well as 1.5010 with more major resistance around the 1.5120/30 area, and behind that at 1.5210/20.
EURGBP – after the brief dip below the support at the 0.8910 level late last week we saw a quick reversal. The major support remains the 200 day MA at 0.8860. There is some selling interest at the 0.9020 area, and behind that at 0.9060, while support should be found around the 0.8970 area.
USDJPY – last weeks technical break above the 200 day moving average continues to dominate with the dollar pushing higher as yen weakness continues to dominate.
The 93.75 January highs remain the key obstacle to further upside and the August highs at 97.70. While above 91.55 the bias remains towards the upside and we could see a drift down to these levels as upside momentum is starting to look a little stretched. |
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| | US Market Report |
Dow closes slightly ahead
US blue chips ended the day higher and edging towards the 11,000 mark, though the other main indices were more subdued.
The Dow finished the day up 9 points at 10,850. Nasdaq shed 2 at 2,395 while the S&P was flat at 1,166.
Earlier in the day, sentiment had improved a little on the Greece debt deal and comments from Ben Bernanke yesterday.
The aid package will provide Greece with bilateral loans from euro zone countries and the International Monetary Fund. European Central Bank President Jean-Claude Trichet, who originally opposed IMF assistance, now backs the plan.
In the US, the government revised fourth-quarter gross domestic product to an annual rate of 5.6%, down from the previous reading of a 5.9% rise.
Banks are leading the best performers on the Dow again today. Bank of America and JPMorgan Chase are near the top of the table. US electronics retailer RadioShack is rumoured to be up for sale for $3bn.
Disc drives manufacturer Seagate Technology was cut from outperform to market perform by BMO Capital Markets. Fellow disc drive maker Western Digital fell in sympathy.
First Solar was the best performer on Nasdaq with fellow solar companies GT Solar and Trina Solar also rising on the back of positive analyst comment.
S&P 500 - Risers
Radioshack Corp. (RSH) $23.65 +8.49%
Slm Corp. (SLM) $12.58 +4.40%
Coach Inc. (COH) $40.31 +4.16%
First Solar Inc. (FSLR) $116.55 +4.01%
S&P 500 - Fallers
Western Digital Corp. (WDC) $39.55 -2.78%
National Oilwell Varco (NOV) $39.92 -2.40%
M&T Bank Corp. (MTB) $80.81 -1.99%
Apollo Group Inc. (APOL) $61.21 -1.95%
Dow Jones I.A - Risers
Alcoa Inc. (AA) $14.27 +1.13%
Chevron Corp. (CVX) $74.43 +0.85%
Bank Of America Corp. (BAC) $17.89 +0.85%
Walt Disney Co. (DIS) $35.33 +0.68%
Dow Jones I.A - Fallers
Pfizer Inc. (PFE) $17.14 -1.44%
Microsoft Corp. (MSFT) $29.66 -1.17%
Merck & Co. Inc. (MRK) $37.43 -0.93%
American Express Inc. (AXP) $41.12 -0.72% |
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| | Monday paper round-up |
Election, Royal Bank of Scotland, ITV
The Conservatives will try to seize the electoral initiative today with a pledge to reverse part of Labour’s national insurance rise due to come into effect next year.
After several weeks in which the Tory poll lead has narrowed, George Osborne, the Shadow Chancellor, will announce that the party will cut the cost for employees and employers, who each face a 1% increase in contributions from April 2011, the Times reports.
Royal Bank of Scotland has handed middle managers a bonus equivalent to 5pc of their salary – by backdating an increase in "benefits" to January 2009. Thousands of RBS staff have received the backdated addition to their "value account", which is usually used to buy benefits such as health care or a company car. Unused sums are typically paid in cash to employees at the end of the tax year, the Telegraph reports.
A raid by Barclays on the pension benefits of 17,000 branch and other frontline staff has been used to offset the bonus tax for its high-earning investment bankers. Details buried in the annual accounts show that the bank made a £371m profit last year from closing its UK final salary scheme to existing members. After a £150m "voluntary" top-up to help clear the deficit, the net profit from the move was £221m. The figure is almost exactly equivalent to the £225m bonus tax paid to cover the £2.2bn of awards to its 23,200 Barclays Capital staff, the Telegraph reports.
Britain should be prepared to "go it alone" with radical reforms to the banking system in the wake of the £1.2 trn bailout of the industry if a cross-border deal cannot be achieved, an influential committee of MPs will recommend today. The Treasury Select Committee will also call on the Government to look again at restricting the types of business that deposit takers can do in the wake of moves by US President Barack Obama to enforce "narrow banking", the Independent reports.
The UK's "largest-ever" investigation into insider trading in the City of London centres on interlinked chains of individuals allegedly making as much as £20m from dealing in the shares of a number of companies, including Scottish & Newcastle. The alleged ring is suspected by the Financial Services Authority of making about £4.1m alone by trading in S&N shares during its £7.8bn takeover by rival brewers Heineken and Carlsberg in late 2007, according to people familiar with the investigation, the FT reports.
The rescue package for Greece agreed by the European Union last week is expected to reassure international financial markets as Athens prepares to launch a syndicated bond Monday or Tuesday, European politicians and bankers said yesterday. Greek bankers hope the EU package, together with the European Central Bank’s move to extend its liquidity operations, will help reverse a flight of deposits from Athens-based institutions since January, the FT reports.
British Gas is to put smart meters in a million homes this year as part of an ambitious programme that will create 2,500 jobs and could cut household energy bills by at least £1bn over the next ten years. The meters monitor energy consumption as it is used and send the information directly to suppliers over wireless networks, the Times reports.
China’s ambitions for global growth were underlined yesterday when Ford agreed to sell Volvo Cars to Zhejiang Geely Holding, the country’s largest private carmaker. The £1.2bn deal, signed in Gothenburg, marks the biggest acquisition yet of an overseas carmaker by a Chinese company. China’s ambitions for global growth were underlined yesterday when Ford agreed to sell Volvo Cars to Zhejiang Geely Holding, the country’s largest private carmaker. the Times reports.
Siemens will this week announce plans to build a wind turbine factory in the UK. The investment, which is likely to be between £50m and £100m, will seek to capitalise on Britain’s expanding market for offshore windmills and will put the German engineering giant in head-to-head competition with GE, its American rival, the Times reports.
Commercial broadcasters could net millions of pounds from a shake-up of advertising rules that could be announced today. Ofcom is expected to propose that ITV, Channel 4, Five and S4C should be allowed to limit the advertising minutes that they sell between programmes, which could push up the price. At present, public service channels must sell all of their advertising minutes — an average of seven and a maximum of twelve per hour, the Times reports.
About 17,000 people working in the financial services industry will have lost their jobs in the first half of this year, according to a report by the CBI. The findings were published as fears grew of a new surge in unemployment across businesses generally, the Times reports. |
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