London close: South African miners rally
Market Movers
- techMARK 2,139.61 -0.26%
- FTSE 100 5,893.52 -0.37%
- FTSE 250 12,080.88 -0.29%
Footsie finished the day below 5900, having traded in a narrow range spanning from 5,883 to 5,916, as worries about Chinese growth weighed on investors' minds.
Last week London enjoyed a good run on the back of apparent enthusiasm of central banks worldwide to give the global economy a leg-up, but speculation mounted over the week-end that the Chinese authorities might not quite as keen on sprightly intervention as previously assumed.
Adding weight to that view was the decision by economists at Citigroup to cut their forecast for Chinese gross domestic product growth this year to 7.6% from 8% before. African miners shrug off lower metals prices
Mining companies were generally off the pace, with the exception of a Lonmin and Aquarius Platinum, both of which benefited from developments in South Africa, where violent industrial unrest and tensions have been running high.
Mining operations have resumed at Aquarius Platinum's Kroondal platinum mine and at Xstrata's chrome mine near the city of Rustenburg in South Africa. American Platinum (Amplats) said work would resume at its strike-hit Rustenburg mines on Tuesday, although defiant striking workers cast doubt on Amplats's management's confident assertion.
South African police launched an offensive over the week-end to disarm miners and bring to an end five weeks of often violent protests which have interrupted mining in the area.
Global platinum powerhouse Lonmin, which said today that strikes at its mines in South Africa have reduced full year sales expectations to somewhere between 685,000 and 700,000 ounces of platinum by the year's end in September, has resumed talks with its striking miners.
The dispute is in its sixth week but could be drawing to a close, with signs of a softening of the miners' demands for an increase in basic pay to 12,500 rand a month.
"We have been mandated to negotiate on a specific figure. The workers are not married to the R12,500," said Jo Seoka, President of the SA Council of Churches, according to the South African Press Asociation.
Other news agencies suggest that the workers have lowered their demand to R11,000 a month.
Elsewhere in the resource sector, FTSE-250 oil and gas company Ophir Energy updated the market on its drilling programme in block R, Equatorial Guinea. These were better than expected, but the market was more concerned by an instruction by the Minister of Energy and Mines, Sospeter Muhongo, ordering the board of Tanzania Petroleum to review all of its agreements with energy companies. Ophir said it is fully compliant in respect of all its Tanzanian licences.
Royal Dutch Shell has suffered a setback on its Alaska drilling programme, with the containment dome aboard the Arctic Challenger barge sustaining damage during a final test of the containment system. The time required to repair the dome, along with steps taken to protect local whaling operations and to ensure the safety of operations from ice flow movement, have led the oil giant to revise its plans for the 2012-2013 exploration programme.
Brokers busy
Anglo-Dutch household goods firm Unilever was wanted after UBS issued a "buy" note on the stock. The same broker has turned bearish on chip-designer Imagination Technologies, downgrading it to "sell" from "neutral".
Mining group Petropavlovsk was upgraded by Citi to "buy" from "neuitral", as the US bank believes the US Federal Reserve's renewed enthusiasm for quantitative easing will support he price of precious metals.
Telecoms titan BT was friendless after Exane BNP Paris downgraded the shares to "neutral" from "outperform".
FTSE 100 - Risers
Ashmore Group (ASHM) 338.10p +3.14%
G4S (GFS) 266.90p +2.26%
Capita (CPI) 753.00p +2.24%
Serco Group (SRP) 595.00p +1.54%
Next (NXT) 3,401.00p +1.22%
GlaxoSmithKline (GSK) 1,432.50p +1.06%
Unilever (ULVR) 2,268.00p +1.02%
Hargreaves Lansdown (HL.) 652.00p +1.01%
Intertek Group (ITRK) 2,743.00p +0.92%
United Utilities Group (UU.) 688.50p +0.81%
FTSE 100 - Fallers
Evraz (EVR) 284.00p -3.30%
International Consolidated Airlines Group SA (CDI) (IAG) 156.00p -2.56%
Anglo American (AAL) 2,036.50p -2.28%
CRH (CRH) 1,251.00p -2.11%
Glencore International (GLEN) 370.85p -2.11%
BT Group (BT.A) 228.20p -2.06%
Rio Tinto (RIO) 3,216.00p -2.00%
Antofagasta (ANTO) 1,308.00p -1.95%
Burberry Group (BRBY) 1,075.00p -1.74%
Johnson Matthey (JMAT) 2,530.00p -1.67%
FTSE 250 - Risers
Aquarius Platinum Ltd. (AQP) 53.00p +8.61%
Lonmin (LMI) 649.00p +5.61%
Cable & Wireless Communications (CWC) 38.25p +4.71%
Cape (CIU) 260.50p +4.33%
Bwin.party Digital Entertainment (BPTY) 110.40p +3.66%
Ladbrokes (LAD) 184.10p +3.14%
Petropavlovsk (POG) 447.40p +3.11%
Stobart Group Ltd. (STOB) 119.40p +2.75%
Kentz Corporation Ltd. (KENZ) 441.00p +2.56%
Dunelm Group (DNLM) 656.00p +2.42%
FTSE 250 - Fallers
Fenner (FENR) 395.00p -5.75%
Dechra Pharmaceuticals (DPH) 569.00p -5.40%
Ophir Energy (OPHR) 608.00p -5.15%
Imagination Technologies Group (IMG) 568.50p -3.64%
FirstGroup (FGP) 253.60p -2.65%
UBM (UBM) 692.00p -2.60%
Kier Group (KIE) 1,366.00p -2.36%
Ruspetro (RPO) 109.50p -2.32%
Fidelity China Special Situations (FCSS) 73.25p -2.20%
Jupiter Fund Management (JUP) 263.10p -2.12%
FTSE TechMARK - Risers
AEA Technology Group (AAT) 0.075p +25.00%
Antisoma (ASM) 1.73p +12.38%
Filtronic (FTC) 46.00p +10.84%
E2V Technologies (E2V) 137.75p +6.99%
Torotrak (TRK) 36.12p +4.71%
Vislink (VLK) 33.00p +3.94%
Pace (PIC) 166.25p +2.31%
Kofax (KFX) 305.75p +0.99%
XP Power Ltd. (DI) (XPP) 1,059.00p +0.86%
Gresham Computing (GHT) 66.00p +0.76%
FTSE TechMARK - Fallers
Electronic Data Processing (EDP) 47.00p -3.09%
Hiwave Technologies (HIW) 1.77p -2.74%
Skyepharma (SKP) 95.00p -2.56%
Psion (PON) 86.25p -1.71%
Emblaze Ltd. (BLZ) 47.75p -1.04%
BATM Advanced Communications Ltd. (BVC) 15.38p -0.81%
NCC Group (NCC) 918.00p -0.70%
Optos (OPTS) 179.75p -0.69%
Microgen (MCGN) 133.00p -0.37%
| Europe Market Report |  | | FTSE 100 | Euronext | Dax perf | CAC 40 |  |  |  |  | | Europe close: Spanish delays and China weakness hit markets
Market movers
FTSE 100: -0.37%
Dax 30: -0.11%
Stoxx 600: -0.34%
Cac 40: -0.78%
Ibex 35: 0.08%
FTSE MIB: 0.93% A lack of agreement over the future of banking supervision within Europe, uncertainty over whether Spain will request assistance from the European Central Bank (ECB), reduced growth prospects in China and rising tensions between Japan and China all served to push European stocks lower on Friday.
EU finance ministers failed to agree to changes to the powers of the European Central Bank at a meeting in Cyprus at the end of last week. This was seen as an important step in helping to avoid catastrophic losses within the Spanish and Irish banking sectors, as it would clear the way for the direct recapitalisation of these countries´ banks.
In addition, Spain has yet to make a formal request for assistance from the European Central Bank. The move, which would see the ECB enter the secondary market to keep down the cost of borrowing for the Eurozone's fourth largest economy, would also entail strict budget conditions that the Spanish government is loathe to accept.
Investors have been expecting Spain to bite the bullet for several weeks but Madrid has so far resisted the political and economic pressure to press the emergency help button.
News out of China further darkened the mood with Citigroup cuttings its growth forecast for the world's second largest economy from 8% to 7.6%. The official Xinhua Chinese news agency also carried a warning that the recent announcement by the US that it would begin a third round of quantitative easing might have inflationary consequences. Companies
The weakest sector on the Stoxx Europe 600 was basic resources, which fell 1.4%, the strongest was food & beverage which gained 0.24%.
Amongst the most troubled stocks were two of the big steel companies ThyssenKrupp which fell on a downgrade from UBS and Swedish outfit SSAB which reported lower demand for "strip" products.
Fashion retailer H&M slipped after claiming the heat wave in southern Europe this August dented sales.
The world's biggest maker of wind turbines, Vestas Wind Systems rose sharply on growing expectations of a tie up with Japanese firm Mitsubishi heavy industries. Japan has announced it will phase out nuclear power in the wake of the Fukushima nuclear disaster. |
| US Market Report | US open: Apple announces record pre-orders for iPhone 5
The main US equity benchmarks have begun today´s trading session with slight falls. That as some observers ask themselves just how effective the Fed´s third round of quantitative easing will really be or not.
Also weighing on sentiment may be the increasing tensions between China and Japan, and the effect which that could have on trade relations in the region.
Apple is on the rise after the company reported that pre-orders for the iPhone 5 topped two million units in the first 24 hours, twice the demand seen for the iPhone 4S last year.
Shares of Office Depot are surging 13% after activist investor Starboard unveiled a 13.3% stake in the office-supply giant, calling the company "undervalued."
Lowe´s has pulled a $1.81bn offer for its Canadian rival Rona.
Waste Connections will pay $1.3bn for various subsidiaries of R360 Environmental Solutions.
Analysts at Stiefel Nicolaus have downgraded their recommendation on shares of Wells Fargo to hold from buy. Weaker than expected manufacturing data
The New York Fed´s regional manufacturing gauge for the month of September has fallen to -10 points (Consensus: -2) from -5.85 in August.
Treasuries rise after Empire State survey
10 year US Treasuries are now gaining 7/32 dollars, with yields at 1.85%.
Front month West Texas crude futures are now rising by 0.25% to the 99.29 dollar per barrel mark on the NYMEX.
| Broker Tips | Broker tips: Aggreko, ASOS, Falkland Oil & Gas
Analysts at Seymour Pierce have this morning raised their price target on shares of temporary power solutions provider Aggreko, while reiterating their "buy" stance on the company´s shares.
This followed a visit to the company´s new bespoke manufacturing facility in Dumbarton, Scotland. In their opinion, the £22m purpose built site highlights how Aggreko's manufacturing expertise is a key source of competitive advantage, in so far as it allows the outfit to react quickly to new opportunities. The broker also calls attention to the cost savings which accrue to the company as a result of its relative size in the market for 1MW class engines.
Due to the above, Seymour Pierce indicates that it remains a Buyer of the shares with an increased £27 target (previously £25). In their view Aggreko has a robust business model to tap into unrivalled growth opportunities. Furthermore, they are of the belief that in its IPP business the gap between supply and demand for power is unlikely to abate anytime soon.
Following a meeting with ASOS, partly to discuss new forecasts following the change in accounting date from March to August, analysts at Seymour Pierce came back reassured that earnings momentum is unlikely to slow and that there remains a wealth of opportunity to drive sales. They could not, however, identify a catalyst for a re-rating of the stock, which is valued at 39.5 times its fiscal year 2013 fully diluted earnings.
Nevertheless, Seymour Pierce is confident that the company can achieve its longer term target of £1bn of sales, and because of this has decided to maintain its hold recommendation, while at the same time upgrading its price target from 1,600p to 1,900p, toward the upper end of the recent trading range.
Merchant Securities has decided to place its valuation of Falklands Oil and Gas under review after the explorer announced the discovery of six Tertiary aged gas bearing reservoirs at Loligo.
While it believes that the "scale of the resource is potentially enormous," its analysts are cautious given that the reservoir was unable to produce a good sample and because the water saturations were reported to be high.
In that same vein, the broker adds that: "From our perspective, obtaining a fluid sample was really the whole point of drilling the prospect. It is frustrating that this was not possible; however, it could now be possible to design a fit for purpose test for a second well. For now, we believe that much more analysis of the data must be performed in order to draw conclusions." |
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