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 |  Subject: ADVFN Morning Euro Markets Bulletin, March 5th 2010  Fri Mar 05, 2010 10:52 am | |
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| London Market Report |
Footsie rising again
Market Movers
FTSE 100 5,548.79 +0.39%
techMARK 1,621.64 -0.03%
FTSE 250 9,705.84 +0.42%
UK equities have opened firmly helped by another good session on Wall St and more gains for the banks.
Schroders, Royal Bank of Scotland, Barclays and Standard Chartered lead the financials higher, while Fresnillo, Lonmin and Xstrata are strong among the miners.
Swiss group Glencore International has confirmed it will exercise its option to buy back the Prodeco thermal coal operations in Colombia from Xstrata for $2.25bn, plus any profits accrued but not distributed by Xstrata since 1 January 2009.
WPP has been hit hard by the recession and slump in advertising spend, but headline profit before tax fell less than expected during a “brutal” 2009 and there was an encouraging return to stability in January. Headline profit before tax for the 12 months to 31 December fell 16%, or 24% at constant currency, to £812.2m, although analysts had expected something nearer £780m.
Defence company BAE Systems has halved its stake in Swedish aerospace group contractor Saab. BAE will convert 1.05m Saab ‘A’ shares in to Saab ‘B’ shares and will then sell 11.2m Saab ‘B’ shares to Swedish investment company Investor AB for SEK 1,066m, equivalent to 95.50 Swedish krona (SEK) per share.
Full-year figures from business publisher United Business Media (UBM) were ahead of expectations in a “tough” year and the outlook for underlying performance in 2010 is “stable”. The shares shot to the top of the risers on the back of the comments. An adjusted profit before tax of £165.1m was down 4% from £171.5m in 2008, but topped forecasts of a bigger drop to £150m. Revenue also fell a smaller then expected 4% to £847.6m.
Profits slumped by 85% last year as recruiter Michael Page felt the full force of the recession, though some of its markets are starting to recover and its expects an improvement this year. Revenue for 2009 was down 26.3% at £716.7m (2008: £972.8m) and by 31.5% allowing for weak sterling. Pre-tax profits crashed to £21.1m from £140.1m.
Investment trust giant Foreign & Colonial saw its net asset value per share jump 18.8% to 304.7p in 2009, despite a 13.1% fall in the value of its private equity portfolio.
Hochschild Mining's executive chairman Eduardo Hochschild has bought the miner's 36.9% stake in Zincore Metals for C$10.3m. The firm acquired the Zincore stake with acqusition of Southwestern Resources in May 2009, but now says it does not constitute a core asset for the company. |
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| | UK Event Calendar today |
INTERIM DIVIDEND PAYMENT DATE
CPL Resources, Daejan Holdings, Downing Protected VCT IV, Downing Protected VCT V, Latchways, Mattioli Woods, Penna Consulting
QUARTERLY PAYMENT DATE
Boeing
INTERNATIONAL ECONOMIC ANNOUNCEMENTS
Consumer Credit (US) (20:00)
Factory Orders (GER) (11:00)
Non-Farm Payrolls (US) (13:30)
Unemployment Rate (US) (13:30)
GMS
Hogg Robinson, Minerva
FINALS
Hardy Underwriting Bermuda, Michael Page International, WPP Group
FINAL DIVIDEND PAYMENT DATE
Connaught, ING Global Real Estate Securities, New Europe Property Investments, Northern AIM VCT, Sage Group, Treatt
Currencies Market Report
Dollar gets a lift
The dollar strengthened against its rivals Thursday following unexpectedly weak US home sales data which raised concerns about the speed of recovery.
Doubts about whether Greece’s austerity measures will actually work also helped the greenback even though European Central Bank (ECB) president Jean-Claude Trichet called then “convincing”.
Greek unions have responded angrily, calling strikes for Friday, while some trade unionists occupied the finance ministry preventing access. Germany’s Angela Merkel and Greece’s Papandreou meet in Berlin later to discuss next steps.
The ECB predictably left rates unchanged after eurozone fourth quarter GDP growth was confirmed at 0.1%, maintaining that rates remained at the appropriate level.
Britain’s central bank also left borrowing costs and quantitative easing unchanged, which, given the somewhat better data seen over the past few days, was pretty much expected.
US data was a bit of a mixed bag ahead of today’s employment report with existing home sales unexpectedly falling 7.6%. But the market shrugged this off after factory orders rose 1.7%, while the weekly jobless figures came in pretty much as expected at 469K.
Traders also liked gains in US productivity and fall in unit-labor costs, which indicates slowing price pressures.
Both the UK and US have key data announcements Friday, with UK producer prices expected to hit a 14 month high of 4.1% fro February. The monthly figure is expected to show an increase of 0.3%. In the US, non-farm payrolls are seen down between 65k and 30k. The unemployment figure is expected to remain unchanged at 9.7%.
Given Wednesday’s ADP data, which surprised on the upside for February, there’s hope that the jobs number could surprise on the upside, though there may be a revision lower of the January figure, as there was on the ADP data. |
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| | European Market Report |
Defence stocks in focus
European markets are mostly higher after Wall Street and Asian markets tended firmer overnight, though Switzerland looks disinclined to join the party.
Investors will be keeping some of their powder dry until the US non-farm payrolls data is released this afternoon. The portents are good after payrolls processing firm ADP said yesterday that private sector firms chopped payrolls by 20,000 in February. It was the 25th month in a row in which the number of job cuts declined, and the lowest monthly change since January 2008.
On this side of the pond Swedish aerospace group Saab is on the way to losing one of its major shareholders. UK defence group BAE Systems is selling off half of its near 20% stake in Saab to Swedish investment group Investor AB and said it will dispose of the rest in due course.
BAE will convert 1.05m Saab ‘A’ shares in to Saab ‘B’ shares and will then sell 11.2m Saab ‘B’ shares to Swedish investment company Investor AB for SEK 1,066m, equivalent to 95.50 Swedish krona (SEK) per share.
Elsewhere in the defence sector Italian firm Finmeccanica is wanted after reporting a 15% rise in net income in 2009 to €645m.
German steel maker Salzgitter posted a 2009 net loss of €386.9m on revenue that slumped 37% to €7.82bn.
Across the markets the French CAC index is up 18 at 3,846 and the German Dax is 23 points higher at 5,819. The Swiss Market index is 4 points weaker at 6,800.
CAC 40 - Risers
Essilor International (EI) € 45.71 +1.94%
ArcelorMittal SA (MT) € 30.30 +1.78%
Lafarge (LG) € 51.90 +1.67%
Societe Generale (GLE) € 43.56 +1.57%
Dexia (DEXB) € 4.23 +1.54%
EADS (EAD) € 15.85 +1.34%
CAC 40 - Fallers
Veolia Environnement (VIE) € 24.35 -2.62%
Vivendi (VIV) € 19.06 -0.68%
Schneider Electric (SU) € 81.11 -0.22%
Pernod Ricard (RI) € 58.08 -0.10%
France Telecom (FTE) € 17.44 -0.06%
Vinci (DG) € 41.21 -0.04% |
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| | US Market Report |
S&P rises for 5th day in a row
After a mid-morning wobble shares kicked on again in the afternoon session ahead of Friday’s keenly awaited non-farm payrolls data.
Expectations of better news on the jobless front were raised by payrolls processing firm ADP which said that private sector firms chopped payrolls by 20,000 in February, the 25th month in a row in which the number of job cuts declined, and the lowest monthly change since January 2008.
First-time unemployment claims fell by 29,000 to 469,000 last week, the US Labor Department reported.
Meanwhile US productivity increased by 6.9% in the fourth quarter, demonstrating that employers are squeezing the most out of employees, while freezing or cutting wages.
Data showing pending home sales fell by 7.6% in January was less well received but a number of retailers boosted sentiment with February sales figures that were better than forecast given the snow storms that hit many parts of the US.
Clothing retailer Abercrombie & Fitch reported a 5% increase in February like-for-like sales. This made it the biggest riser in the S&P. Aeropostale, the clothing chain focused on the youth market, saw like-for-like sales rise 7% in February versus market expectations of 4%, while Zumiez, which targets the skateboard and snowboard crowd, also topped expectations with like-for-like sales growth in February of 11.2%.
Elsewhere in the retail sector Family Dollar Stores was wanted after it upped second quarter earnings guidance while in similar fashion Petsmart bounded forward after raising earnings guidance for the full year and its first quarter.
Sportswear retailer Foot Locker legged it higher after the board extended the company’s share buy-back programme.
The Dow Jones 30-share index was boosted by broker upgrades for three of its constituents. Bank of America raised Walt Disney from neutral to buy. The move was sparked by new film releases Alice in Wonderland and Toy Story 3. Meanwhile fizzy drinks maker Coca-Cola and aircraft maker Boeing both saw their ratings raised by UBS.
The Dow closed 47 points higher at 10,444, while the S&P 500 advanced 4 points to 1,122. The NASDAQ Composite jumped 11 points to 2,292.
Healthcare insurers were under the weather on fears that President Obama’s healthcare reforms are finally moving closer to fruition. UnitedHealth was the major faller in the sector but Aetna and Cigna also fell back.
Internet computers operator VeriSign reached its highest share price for 18 months. Lazard increased its target from $25 to $29.
TiVo, the company whose name is synonymous with digital video recorders in the US, was boosted by a court ruling in its favour on patent infringements by satellite TV company Dish Network.
Takeover speculation pushed AK Steel higher. In excess of 72,000 call options to buy the stock were traded, the highest level since May of last year and 13 times the moving four-week average.
S&P 500 - Risers
Abercrombie & Fitch (ANF) $41.52 +14.57%
Family Dollar Stores (FDO) $35.24 +8.07%
American International Group Inc. (AIG) $26.71 +7.36%
A K Steel Holdings Corp. (AKS) $24.37 +6.84%
S&P 500 - Fallers
Southwestern Energy (SWN) $40.77 -4.05%
International Game Tech (IGT) $17.17 -3.54%
Unitedhealth Group (UNH) $32.95 -3.37%
Nabors Inds Inc. (NBR) $22.50 -3.02%
Dow Jones I.A - Risers
Walt Disney Co. (DIS) $32.57 +2.94%
Boeing Co. (BA) $65.55 +1.71%
American Express Inc. (AXP) $38.89 +1.59%
United Technologies Corp. (UTX) $70.37 +1.11%
Coca-Cola Co. (KO) $54.47 +1.00%
Dow Jones I.A - Fallers
McDonald's Corp. (MCD) $63.43 -0.31%
Caterpillar Inc. (CAT) $58.45 -0.20%
Merck & Co. Inc. (MRK) $37.14 -0.19%
International Business Machines Corp. (IBM) $126.72 -0.13%
Home Depot Inc. (HD) $31.44 -0.10%
Nasdaq 100 - Risers
Ross Stores Inc. (ROST) $51.24 +3.63%
Verisign Inc. (VRSN) $26.16 +3.19%
Urban Outfitters Inc. (URBN) $34.21 +2.43%
Nasdaq 100 - Fallers
Dish Network Corp. (DISH) $20.81 -4.13%
Intuitive Surgical Inc. (ISRG) $354.49 -2.29%
Lam Research Corp. (LRCX) $34.54 -1.88% |
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| | Friday paper round-up |
HSBC, Scottish & Southern, ITV
The supertax on bank bonuses will reap more than £2.5bn for the Treasury, giving the UK government an unexpectedly large windfall to spend ahead of the general election, a Financial Times survey of 16 global banks has found.
Government insiders predict that the receipts of £2.5bn would exceed by about £1.5bn the total tax take from a bigger bank bonus pool anticipated before the supertax was imposed, the FT reports.
One of the UK’s leading inward investors and formerly a strong supporter of euro membership has made a volte-face on the European single currency, expressing relief that the country chose not to join. Masahiro Sakane, chairman of Komatsu, the Japanese maker of construction and mining equipment, told the Financial Times in an interview that the company’s plant in north-east England would benefit from the pound’s sharp fall against the euro when demand for its products starts to recover, the FT reports.
Ten million families will see their gas bills fall by just £30 a year after a 4% price cut that was dismissed yesterday as a token gesture. Scottish & Southern Energy is delaying the price cut until March 29 — at the end of the winter peak period — and leaving its electricity charges unchanged. That means a customer who buys both gas and electricity from the company will pay an average of £1,162 per year, the Times reports.
HSBC will pay Michael Geoghegan, chief executive, an extra £800,000 a year in "allowances" and "benefits in kind" for moving his family from London to Hong Kong. The "allowance" element, of £300,000 a year for "family disruption", is likely to infuriate shareholders who recently rejected the bank's plans to award Mr Geoghegan a pay rise of almost 40pc. The allowance, "in recognition of the additional costs of living" in Hong Kong is almost equivalent to the estimated £350,000 salary increase planned, the Telegraph reports.
Britain would still be in recession if the Bank of England's quantitative easing programme had not been introduced, economists said on Thursday, as the Bank's Monetary Policy Committee (MPC) voted against extending the scheme on the anniversary of its inception. Economists at Capital Economics estimated that since it began in March last year, the Bank's £200bn asset purchase programme has boosted gross domestic product (GDP) by 2% to 3%, the Telegraph reports.
Icelanders are preparing this weekend to reject a deal supposed to end the bitter Icesave dispute between Reykjavik and London. About 75% of Iceland is expected to vote “no” in an emotionally charged referendum to be held tomorrow. Despite last-minute negotiations with the UK and the Dutch finance ministry, the referendum looks a lost cause, the Times reports.
The razzmatazz of Indian Premier League (IPL) cricket is coming to a television set near you next week, after ITV picked up the rights out of the ashes of the collapse of Setanta Sports. ITV announced yesterday it had secured the UK broadcasting rights to this year's IPL Twenty20 cricket competition, which gets underway in a week, the Times reports.
At least ten Toyota drivers have complained to American safety officials that their cars had accelerated unexpectedly after the company had supposedly fixed the problem. One driver, who has not filed a complaint, said that he narrowly avoided driving over an embankment and hitting a wall after his 2009 Camry accelerated on its own five days after being serviced under the recall programme, the Times reports.
A US share tipster with celebrity connections who branded himself as “America’s Prophet” has been charged with a $6m (£4m) investment fraud. Sean David Morton, who was on Thursday charged on a number of counts of securities fraud by the Securities and Exchange Commission (SEC), raised the funds by telling potential investors he could accurately predict stock market movements using psychic abilities, the Telegraph reports.
The housing market seems set to undergo its own "double-dip" recession, with Halifax announcing yesterday that there was a 1.5% fall in house prices between January and February, and with the slow economic recovery now on course to depress sentiment for the rest of the year, the Independent reports.
Iron ore producers have offered Chinese steel mills a 50 per cent hike in the price of the commodity during annual negotiations, reports in the state-owned Chinese media suggested yesterday. The English-language China Daily, which is controlled by the ruling communist party, quoted officials from Chinese steelmaker Baosteel saying that it would wait to see how talks between Japanese mills and miners such as BHP Billiton and Rio Tinto developed, before committing to any offer, the Independent reports. |
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